Tank Storage magazine December 12 by Woodcote Media Ltd

The voice of the storage terminal industry

december 2012

Volume No. 8 Issue No. 5

Oiltanking keeps on growing The companyâ&#x20AC;&#x2122;s senior management talks us through the latest acquisition of Helios terminal in Singapore

Breaking ground in the literal sense With the Jurong Rock Cavern operatorship still scheduled to begin next year, JTC discusses the project so far

Regional focus: tank storage in ASIA

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Margaret Dunn Associate publisher

A new look for a new year As 2013 rapidly approaches, we thought we’d get in early by launching a new look for Tank Storage magazine. Despite difficult economic conditions around the world, we’re celebrating here after being granted our first ever full audit circulation certificate. This Business Publications Audit now means we have concrete proof showing how many copies of the magazine are printed, where it is distributed and the fact that over half of our readers have requested their copy. You might ask why we haven’t done this earlier, having been around for eight years, and the answer is: it hasn’t really been necessary. Being a small team we’re very trustworthy and transparent, well-known in the sector and people are comfortable we do what we say we do. But, in difficult economic times, everyone

TANK STORAGE • December 2012

is cutting costs and people start worrying they’re not getting what they pay for. Now there’s one less thing to worry about. And with a new approach we thought we’d bring in a new look. Tank storage is generally thought of as being a stable, reliable sector, but that doesn’t have to equal boring. We’re hoping to bring a slightly more light-hearted approach to the magazine in an attempt to make work a little more interesting. This comes with increasing the magazine to six times a year from the previous five, in a direct response to reader demand. We hope you like our new look and, as always, welcome your suggestions on further improvements. Best wishes, Margaret

contents

December 2012 Volume 8 issue 5 Horseshoe Media Ltd Marshall House 124 Middleton Road, Morden, Surrey SM4 6RW, UK www.tankstoragemag.com MANAGING DIRECTOR Peter Patterson Tel: +44(0)20 8648 7082 peter@horseshoemedia.com Associate publisher & editor Margaret Dunn Tel: +44 (0)20 8687 4126 margaret@tankstoragemag.com Deputy editor James Barrett Tel: +44 (0)20 8687 4146 james@tankstoragemag.com

contents news 1 Comment

From the track to the tank

2 Contents 4 Terminal news 31 Technical news 44 Incident update 47 Regulations

Assistant Editor Keeley Downey Tel: +44 (0)20 8687 4183 keeley@horseshoemedia.com Advertising Sales manager David Kelly Tel: +44 (0)203 551 5754 david@tankstoragemag.com South American sales representative Roberto Bieler +55 21 3268 2553 +55 21 9465 2553 rbieler@farbitec.com

Oiltanking keeps on growing ‘Opportunities in the oil storage market don’t come up every day, so when they do we grab them with both hands,’ both Oiltanking Asia Pacific’s president and VP for business development explain

PRODUCTION Alison Balmer Tel: +44 (0)1673 876143 alisonbalmer@btconnect.com SUBSCRIPTION RATES A one-year, 6-issue subscription costs £150 (approximately $240/€185 depending on daily exchange rates). Individual back issues can be purchased at a cost of £30 each Contact: Lisa Lee Tel: +44 (0)20 8687 4160 Fax: +44 (0)20 8687 4130 marketing@horseshoemedia.com No part of this publication may be reproduced or stored in any form by any mechanical, electronic, photocopying, recording or other means without the prior written consent of the publisher. Whilst the information and articles in Tank Storage are published in good faith and every effort is made to check accuracy, readers should verify facts and statements direct with official sources before acting on them as the publisher can accept no responsibility in this respect. Any opinions expressed in this magazine should not be construed as those of the publisher.

ISSN 1750-841X

December 2012 • TANK STORAGE

contents

Jurong Island: breaking ground in the literal sense With space already tight on Jurong Island, terminal operators are eagerly awaiting news on the region’s space saving initiatives. Tank Storage magazine talks to JTC to find out the latest on its underground rock caverns

China on the rise

features 53 Tighter controls on chemicals increases compliance challenges 58 Tank terminal update – Asia 71 Big plans, but what is the reality? 75 State-run companies look to the independents for storage needs 84 Tank Storage Asia exhibitor preview: Celebrating its fourth year in Singapore 92 Making insulation a long-term investment 95 Looking to the future More than 900 attendees, 285 companies, 186 first time visitors and 80 countries represented made it the biggest EMEA HUG ever 98 Palm oil lining solutions 101 Layered protection Critical safety functions, such as emergency shutdowns, need to be kept separate from generic IT solutions to ensure efficient, fail-safe operations 104 Germany: know what’s changed A summary for those that missed the 8th Conference on Flat Bottom Tanks in Munich 106 A problem shared: TSA review 108 Events page Ad index

The voice of the storage terminal industry

december 2012

Volume No. 8 Issue No. 5

Oiltanking keeps on growing The company’s senior management talks us through the latest acquisition of Helios terminal in Singapore

Breaking ground in the literal sense With the Jurong Rock Cavern operatorship still scheduled to begin next year, JTC discusses the project so far

Marine terminals: the next step in standards & safety

TANK STORAGE • December 2012

Regional focus: tank storage in ASIA

Front cover courtesy of Rosemount Tank Gauging

terminal news

URT acquires 5m barrel storage terminal from Phillips 66 United Riverhead Terminal (URT), an affiliate of Pennsylvanian United Refining Company, has completed

its acquisition of downstream energy company Phillips 66’s Riverhead Long Island bulk storage terminal and

Phillips 66 is divesting assets that are not part of its future business

associated assets. The Long Island, New York-based terminal is spread across 280 acres and features 20 storage tanks with a total capacity of 5 million barrels for petroleum products such as crude, heavy fuels, diesel and petrol. The facility also features a truck transfer rack and an offshore barge/ship platform which is the only deepwater loading/unloading platform on the US’ East Coast. ‘The terminal itself is well located strategically; access to low-cost and reliable marine transportation is vital to the competitiveness of its customers in petroleum and petrochemical operations. Riverhead allows access to high capacity deepwater marine facilities that will give

them a cost advantage over other locations,’ John Catsimatidis, chairman and CEO of Red Apple Group, which includes the buyer, said in a statement. ‘We will be able to provide storage and terminalling services to a wide variety of customers throughout the world.’ ‘The sale of the Riverhead Terminal is part of Phillips 66’s on-going strategy to divest assets that do not fit with our long-term business objective,’ explains Tim Taylor, executive VP of commercial, marketing, transportation and business development for Phillips 66. The terms of the agreement were not disclosed. Moelis & Company served as advisor to URT, while Bank of America Merrill advised Phillips 66 throughout the transaction.

Arc Terminals and CN partner to build rail terminal in Alabama Independent terminal company Arc Terminals and CN have joined forces to build a rail tank car unloading terminal in Mobile, Alabama that will handle Western Canadian heavy and Bakken light crude oil destined for refineries on the Gulf Coast. The terminal is expected to come online by June next year. It will eventually be able to handle 120 tank cars per day, or 75,000 barrels of crude oil, but will have an initial volume of 40 tank cars of crude oil per day. The terminal will be able to receive both general purpose and insulated coiled cars. Many similar facilities can handle only general purpose tank cars. ‘The Mobile facility – the first rail tank car crude oil unloading terminal in Alabama – will provide good access to Gulf Coast refineries and allow quick turnaround of tank cars, increasing product delivery and fleet velocity

and reducing costs for car owners,’ John Blanchard, president of Arc Terminals, said in a statement. ‘The rail transload terminal

Mobile destination. A single-line haul is more efficient and less expensive than those involving two or more rail carriers and multiple terminal switching.’

be delivered to Gulf Coastbased customers via pipeline, or by vessel as far as Corpus Christi, Texas. The Blakeley terminal has

The terminal will handle heavy and Bakken light crude oil

will handle heavy crude oil from Western Canada and light crude oil from the Bakken basic via CN, which will provide Canadian producers single-haul service to our

A new pipeline will also be built to connect the new rail transloading facility to Arc Terminals’ Blackley tank farm. From Arc Terminals’ facility crude oil can then

a storage capacity of 700,000 barrels of crude, fuel oil and asphalt. Terminal capacity should be expanded to more than 1 million barrels to meet potential future demand.

December 2012 • TANK STORAGE

terminal news

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terminal news

Inergy to acquire Rangeland Energy for $425m

news in brief...

Texas-headquartered midstream energy company Rangeland Energy has entered into a definitive agreement to sell the company to Inergy Midstream, an energy storage and transportation company headquartered in Kansas, Missouri, for $425 million (€332 million). Expected to close at the beginning of December, the transaction will see Rangeland’s management continue with midstream development opportunities across North America under the existing company name. Rangeland owns and operates North Dakota’s largest open-access crude oil distribution hub the COLT system. It features a large crude oil rail loading terminal in the state’s Williams County and related storage and pipeline infrastructure. The hub serves

Energy trader Vitol is to complete construction of an extensive storage tank farm in Cyprus by the end of 2014. The €300 million project in the Vassiliko area of Cyprus will create terminal storage capacity of 643,000m3 for the likes of petrol, diesel, jet fuel, gasoil and MTBE. VTTV, a 50/50 venture between Vitol and Malaysian shipping company MISC, began construction work on the island in early 2011.

oil refiners, marketers and producers, and has contracted aggregate volume commitments of approximately 150,000 barrels of crude per day. ‘COLT is well positioned to be the premier crude oil terminal in the Bakken,’ comments Rangeland CEO Chris Keene. ‘Through this on-going relationship, we are well positioned and funded to continue developing and growing its business in other emerging regions.’ Inergy chairman and CEO John Sherman says: ‘The COLT assets provide Inergy with a solid position in this prolific region and are a great complement to our existing midstream operations.’ Citi served as Rangeland’s financial advisor for the transaction, with Jones Day providing legal counsel.

GT opens OmniPort terminal GT Logistics has officially opened its new $95 million (€74 million) GT OmniPort terminal in Texas, US. Built on 100 acres of land at Port Arthur, the terminal can now receive crude oil transported via truck, rail, ship and barge and is able to facilitate up to 250 rail cars. GT Logistics has broken ground on the second phase of the project, which includes rail storage capacity on 300 acres. The rail storage terminal will be able to handle, switch and transload more than 1,000 railcars when construction is finalised. ‘Once fully operational, the terminal

will create up to 45 new jobs,’ Beau Maida, director of rail operations for GTL affiliate GT Rail, was quoted as saying. ‘The opening of the GT OmniPort rail terminal offers rail users a significant opportunity to improve operating efficiencies in the Golden Triangle region as our location, ability to provide onsite locomotive power, use of AEI tag readers for inventory reporting, staff of experienced and certified rail professionals and access to excellent rail service with available main line switching frequency seven days a week will ensure customers safe and efficient service.’

Phase I of ECHO terminal operational Phase I of Enterprise Products Partners’ Enterprise Crude Houston (ECHO) storage terminal in Harris County, Texas is complete. This initial stage includes three storage tanks with a total 750,000 barrels storage capacity and the facility is now receiving deliveries of crude oil. Phase II of the project will see the construction of an additional 900,000 barrels of storage. Enterprise says this phase could be operational by the beginning of 2014. It also estimates that the ECHO facility could have up to 6 million barrels of crude oil storage capacity when completed. AJ Teague, executive VP and COO of Enterprise’s general partner, says: ‘Enterprise’s ECHO facility is at the centre of a historic and fundamental shift in our nation’s crude oil infrastructure by linking growing supplies of North American crude and condensate production with the US Gulf Coast refining complex. Ultimately, ECHO will provide pipeline and waterborne access to every major Gulf Coast refinery, representing more than 7 million barrels per day of capacity.’

New Vitol storage farm gathers pace in Cyprus

New proposals for Colorado fuel facility A new bulk propane fuel storage facility has been proposed in Colorado, US. The plans for the Colorado Propane Supply Distribution Facility would see 48 bulk propane storage tanks, which would store 30,000 gallons of each, provide a total storage capacity of 1.44 million gallons. The earmarked site is located on the Colorado 120 route and the 35-acre site once housed a Domtar gypsum plant. Any new facility would generate up to seven local jobs.

Kuwait takes delivery of new storage tanks Global logistics company Rickmers Linie has completed the transportation of three LPG storage tanks from Malaysia to Kuwait. The tanks, which each weighed 475 tonnes, were destined for the new Kuwait Oil Tanker Company LPG filling station at Umm Al-Aish. The new plant will be built on an area of 150,000m2 and provide 15 million cylinders of gas every year. The storage tanks were constructed by KNM Process System, part of the global KNM Group.

New storage terminals set for Costa Rica Costa Rica-based Terminal de Graneles Moín (TGM) is to build a terminal for the purpose of receiving, storing and dispensing liquids.

The project has an investment of around $5 million (€3.8 million) to provide storage tanks and reception services at the port and for product shipping. The project will be developed by TGM advisors German Moreno and Rodolfo Blasio, with investment by the PASQUI Group, and is set to measure 20,000m2 located between the Químicos Holanda facilities and terminals belonging to Transmerquim and the former Exxon in Moin, Limon.

December 2012 • TANK STORAGE

terminal news

Greenergy expands fuel supply business into Canada Greenergy has announced plans to penetrate the fuel industry in Canada. From the second quarter of next year, the UK-based supplier of petrol and diesel will begin supplying fossil and biofuels to south western Ontario. Greenergy’s first supply location in Canada will be Vopak’s Hamilton terminal. From here it will supply E10 petrol, ethanol and ULSD. A number of terminal improvements are to be made to the site before Greenergy begins supplying E10 in 2013. ‘In the UK, Greenergy has achieved long-term growth by delivering what every customer ultimately wants – lowest priced fuel combined with the highest levels of customer service, supply resilience, operational efficiency and sustainability.

Greenergy will supply fossil and biofuels to Canada by Q2 2013

We intend to replicate that strategy in Canada,’ Paul Bateson, COO of Greenergy’s international operations and director of Greenergy Fuels Canada, says.

Greenergy currently supplies over 25% of the UK’s road fuel market. In a statement, the company said it is now looking to expand internationally and build

on its existing operations in the UK, US and Brazil. The company intends to expand to other supply locations in Canada in due course.

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terminal news

TransCanada and Phoenix join forces for pipeline TransCanada and Phoenix Energy Holdings are to develop the Grand Rapids Pipeline in Northern Alberta, Canada after entering into binding agreements. Costing $3 billion (€2.3 billion) to build and stretching 50km, the pipeline will be able to transport up to 900,000 barrels a day of crude oil and 330,000 barrels

a day of diluent between Fort McMurray and the Edmonton/Heartland region. Under the agreement, each company will own 50% of the project, which is expected to be operational by the beginning of 2017 subject to regulatory approvals. The investment will be spent between 2014 and 2017.

TransCanada will operate the system and Phoenix has entered a long-term commitment to ship crude oil and diluent on it. ‘As Alberta crude oil production continues to grow, it’s critical to have the infrastructure in place to move oil to market from emerging developments west of the Athabasca River. This is

TransCanada will build the pipeline and Phoenix will use it to transport crude oil

the first major pipeline project to meet the needs of this fast growing area,’ Russ Girling, TransCanada’s president and CEO, said in a statement. ‘We are pleased Phoenix is joining us on the Grand Rapids Pipeline project to transport this growing, longterm supply of Canadian crude oil in a manner that respects the communities and environment where the pipeline will operate.’ Phoenix president and CEO Zhiming Li said transportation in the Athabasca region ‘has become bottlenecked’ and recognised that the venture with TransCanada is ‘crucial to implement our development strategy’. The project will be built, owned and operated by the Grand Rapids Pipeline partnership, which is jointly owned by Phoenix and a wholly owned subsidiary of TransCanada. TransCanada expects to apply for regulatory approval for the project next year.

Enbridge to transfer crude oil storage assets for over $1bn Energy company Enbridge has entered into an agreement that will see it transfer a group of crude oil storage, wind power and solar power assets at a price of $1.164 billion (€900 million) to the Enbridge Income Fund (ENF). Enbridge Income Fund Holdings’ public shareholders will have the chance to approve the transfer at a meeting on 7 December 2012 and its closure is subject to the completion of a $222 million subscription receipt public offering by ENF. Enbridge will receive cash proceeds from the transaction of $222 million and an additional $582 million in the form of term debt of the fund. The fund is

expected to repay to Enbridge through issuance of public term debt. Enbridge will also subscribe for $305 million of additional Enbridge Commercial Trust (ECT) preferred units and $55 million in common shares of ENF on a private placement basis at the same price per security as the subscription receipt offering, maintaining its interest in ENF at 19.9%. ‘We are pleased to be moving forward with this second billion dollar plus drop down to the Enbridge Income Fund, consistent with the sponsored vehicle drop down strategy outlined at our recent Enbridge Day investor conference,’ J Richard Bird, executive

VP, CFO and corporate development at Enbridge, said in a statement. ‘The drop down will enhance the distributable cash flow of the fund and ENF, benefitting both the public investors in ENF, as well as Enbridge through our 19.9% interest in ENF. The transaction will provide $88 million of net funding for our large growth capital investment programme, including further front end bolstering of our equity base. This funding strategy is modestly accretive to Enbridge’s earning per share in the near term compared to issuing Enbridge common shares, and more accretive over the medium term.’

December 2012 • TANK STORAGE

terminal news

Titan reveals enhanced agreement with Guangdong Zhenrong Oil logistic and marine services provider Titan Petrochemicals Group revealed in September it entered into a supplemental agreement with energy trading company Guangdong Zhenrong Energy that has ‘enhanced its initial subscription agreement’ announced in August. Under the new agreement, Guangdong Zhenrong could invest HK$928.2 million (€92.6 million), instead of the initial HK$175 million for 90% shares in Titan agreed in the original terms, and restructure all debt. A Guangdong Zhenrong Energy spokesperson says: ‘The increased offer and improved debt restructuring proposal underscore our total commitment to investing in Titan. At this stage our immediate focus is on supporting a creditors’ restructuring and ensuring a favourable resolution of the key outstanding litigation against Titan, and to fully support Titan’s development.’ In addition, Guangdong would subscribe to 3,461,093,248 Preferred Share A for a total consideration of HK$538.2 million (HK$0.1555/ Preferred Share A) instead of subscribing for 7 billion new Adjusted Shares for a total

price of HK$175 million. Guangdong agreed to provide an equity line of up to HK$390 million by the subscription of a maximum 780 million Preferred Shares B at HK$0.50 per Preferred Share B, in tranches of HK$10 million each, during a period of five years from the completion of the subscription. Patrick Wong Siu Hung, executive director of Titan, says: ‘The new board has made significant process over the past three months. It received Guangdong Zhenrong’s intention to restructure Titan’s debt and take over the company in July and concluded the subscription agreement with Gunagdong Zhenrong in August. ‘Subsequently, it gained approval from Guangdong Zhenrong’s shareholders for its plans for Titan. In addition, Guangdong Zhenrong made a further move by acquiring Tsoi Tin Chun’s remaining 45.47% stake in Titan to become its single largest shareholder. We believe the supplemental agreement is by far and away the most compelling option of all those that have been disclosed for Titan creditors and shareholders.’

Guangdong Zhenrong is Titan’s largest shareholder

TANK STORAGE • December 2012

terminal news

Singapore LNG announces new storage tank Singapore LNG is to develop a fourth storage tank at its new liquefied natural gas (LNG) terminal on Jurong Island. The new S$500 million (€319 million) tank, slated for completion by 2017, will increase the terminal’s storage capacity to 9 million tonnes a year. Phase 1 of the Jurong Island terminal will come online next year when the construction of two LNG storage tanks with a total capacity of 3.5 million tonnes is complete. A third LNG storage tank is expected to come online later in 2013

Singapore LNG is adding to its terminal on Jurong Island with a fourth storage tank and will boost capacity to 6 million tonnes per year. The terminal, designed to feature a maximum of six storage tanks, will enable

Armada plans 1.5million m3 storage facility in Malaysia Armada Sdn Bhd is developing a new oil and gas storage facility and refinery in Malaysia. Costing RM8.5 billion (€2 billion), the Sabah Oil Terminal will be established in two phases. The first phase will see an investment of RM4.7 billion for the construction of 1.5 million m3 of crude oil storage and 50,000 barrels of crude oil for refinery, related infrastructure, and housing. Phase II covers the building of the refinery and other support facilities for an additional RM3.8 billion. No details on project funding have been revealed. Armada will break ground on facility at the beginning of 2013, with the entire project predicted to take between four and five years to complete. It will be built on a 1,000-acre site in Sipitang Oil and Gas Industries Park, Sabah. An estimated RM61.13 billion has been invested this year in developing oil and gas projects across Malaysia.

Singapore to import LNG from around the world. Singapore LNG says a fifth tank could be developed in the future, or even a second terminal.

The project was unveiled on 24 October at the Gas Asia Summit, by Mr S Iswaran, second minster for Trade and Industry.

Sinopec develops new $850m project in Indonesia Asia’s largest refiner Sinopec is developing an oil storage terminal that will become the largest in Southeast Asia. To be built on 360 hectares in Indonesia’s Batam Free Trade Zone, the $850 million (€660 million) PT West Point Terminal will be Sinopec’s first facility of such size located close to Asia’s oil trading hub Singapore. The facility will have a capacity of 16 million barrels for

the storage of crude and refined fuels. Sinopec Kantons Holdings will hold a 95% share in the terminal, which is expected to take between 18 months and two years to complete. The President of Indonesia, Susilo Bambang Yudhoyono, is expected to attend the ground breaking ceremony scheduled for 10 October, Reuters reported. A refinery and petrochemical facility could be built in a second phase.

Puma Energy and Medco Energi sign agreement In Indonesia, midstream and downstream energy company Puma Energy is to buy a 63.88% stake in PT Medco Sarana Kalibaru, a subsidiary of PT Medco Energi Internasional. The two companies announced their strategic alliance in October. The agreement includes a 22,700m3 fuel storage terminal in Tanjung Priok International Port, North Jakarta and a dedicated jetty and truck loading bays. The agreement is expected to close at the beginning of December, subject to regulatory approvals. The

new venture will be called PT Puma Medco Petroleum and will continue to supply fuel products such as High Speed Diesel to clients across Indonesia. Lukman Mahfoedz, president director and CEO of MedcoEnergi, says: ‘We have entered into this strategic alliance designed to bring together strengths and expertise of both companies to create the best fuel trading and distribution business in Indonesia and the surrounding region for the benefit of our customers, employees and other stakeholders in the country.’

December 2012 • TANK STORAGE

terminal news

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TANK STORAGE • December 2012

terminal news

Buckeye seeks permission to charge market-based rates in NYC Buckeye Pipeline, part of Buckeye Partners – owner and operator of the largest independent liquid petroleum products pipeline – has filed an application with the Federal Energy Regulatory Commission (FERC) seeking permission to charge market-based rates for deliveries of refined petroleum products to the New York City market and surrounding areas. The application comes after a number of airlines complained that Buckeye’s delivery rates to New York were ‘unjust’ and ‘unreasonable’ under the Interstate Commerce Act based on a cost coverrecovery rationale. Approval from FERC would allow Buckeye to set its rates based on competitive forces. Delta Air Lines, United/ Continental Airlines, JetBlue Airways and US Airways all filed a complaint on 20 September, accusing Buckeye of charging too much for the delivery of product from New Jersey to five destinations on its Long Island system, including deliveries of jet fuel to the Newark, LaGuardia and JFK airports. Buckeye Pipeline believes the New York City area market is robust and highly competitive, with New York Harbor – one of the world’s most active refined petroleum products markets. The company says that it is appropriate that it be permitted to charge market-based rates for its services in this investment.

Eight Vopak storage terminals have been ISCC certified

Vopak receives multisite ISCC for biofuels storage terminals Vopak has been awarded the first multisite International Sustainability and Carbon Certification (ISCC) for a number of its storage terminals. The company certified its first terminal in Rotterdam on 13 December 2011. ‘Rotterdam is the biofuels hub of Europe,’ Maurice Houben, Vopak’s sales and marketing manager for global vegoils and biofuels, explains. ‘Many traders and blenders ship their biofuels via the port and were auditing their supply chains, resulting in audit requests for our terminals.’ The multisite certificate applies to five Rotterdam-based terminals, two facilities in Houston, US and one in Jakarta, Indonesia. Vopak is already looking to expand on this and announced it is considering adding terminals in Hamburg and Barcelona to the certificate in the next 12 months. The plan is to have a terminal in Singapore certified by July 2013. ‘The certification is another step to further enhance our biofuels terminal network and to remain a reliable partner for both our local and international ethanol and biodiesel customers,’ Vopak says. The company was guided by

Control Union Certifications. The entire process took about six months. The time was spent on preparation, setting-up the internal ISCC team, creating training documents, incorporating the ISCC internal audit in the general company audit approach and executing external audits at the corporate office and three storage locations. The costs incurred consist of external auditing and certification costs on top of the man-hours invested to integrate the certification requirements in Vopak’s standard way of working. In order for biofuels to access the European markets and count towards the biofuels blending mandates, specific sustainability requirements must be met by the companies involved in the biofuel supply chain. Customers that need ISCC certified storage can use Vopak’s terminals without having to worry – it is an automatic confirmation that they operate according to sustainability standards. Between 5 and 7.5% EBIT share of Vopak’s capacity is used for the storage of biofuels and vegoils and the company believes that going forward renewable fuels will remain part of the transportation mix.

Buckeye to offer crude oil services at Albany storage terminal Buckeye Partners is to offer crude oil services at its storage terminal in Albany, New York after forming a long-term agreement with an Irving Oil subsidiary. Under the agreement, Buckeye will provide around 1.8 million barrels of oil storage, offloading unit trains and throughput when the terminal opens by the end of the year. Buckeye president and CEO Clark Smith says the offering of services ‘is part

of our strategy to increase and improve the utilisation of our existing assets’. Buckeye says it will modify the terminal so that it can handle ethanol in addition to crude oil, with a total capacity of over 135,000 barrels per day. ‘Rail transport has become a critical component of the logistics chain as domestic crude oil production has increased significantly,’ adds Smith.

December 2012 • TANK STORAGE

terminal news

BP begins Adelaide fuel terminal expansion BP has broken ground on the planned expansion of its Largs North fuel storage terminal in Adelaide, Australia. Under Phase I of the $20 million (€15 million) project, BP will build a new 30 million litre storage tank that will allow larger volumes of diesel to be stored at the site. ‘Adding to our storage capacity in Adelaide will allow us to further optimise shipping operations from our Kwinana refinery in Western

Australia and capture the opportunities presented in South Australia,’ says BP Australasia president Paul Waterman. BP has also invested $4 million to upgrade the storage terminal’s fire fighting system and installed a vapour recovery unit at the cost of $2 million. The expansion of the terminal was announced in April last year and BP has since been finalising plans, clearing the site and undertaking ground works. The company says it is looking

to spend a further $20 million at the Largs North terminal over the next five years. BP says that, subject to final approvals, this added capital injection will improve reliability, reduce risk and further improve environmental performance at the facility. ‘We also plan to continue to invest in our terminal infrastructure to reduce risk and ensure our operations are safe, reliable and able to meet the needs of our customers,’ Waterman adds.

Mercuria and Sinopec Kantons collaborate Mercuria Energy Asset Management (MEAM), a wholly owned subsidiary of Mercuria Energy Group, and Sinomart KTS Development, a wholly owned subsidiary of Sinopec Kantons Holdings, are to set up a global bulk liquid storage JV following the signing of binding agreements. Under the agreements, Sinomart will acquire a 50% equity interest in European bulk liquid storage operator Vesta Terminals from MEAM. Vesta Terminals owns around 1.6 million m3 of petroleum products and biofuels storage at three terminals in Antwerp, Flushing and Tallinn. The transaction is subject to the completion of certain conditions, after which Vesta Terminals will continue to provide storage services to existing and new third party customers alongside its new shareholders. Paul Chivers, Mercuria’s group head of corporate development, attended the signing of the sale and purchase agreement on 15 October. He says: ‘This transaction further underlines the significance Mercuria places on our relationships in China and the close international co-operation of Mercuria with the Sinopec Kantons group. ‘The entry of Sinomart as a major shareholder in Vesta Terminals strongly supports Mercuria’s strategic plans for the future, and for Vesta Terminals’ employees and customers it represents a strong vote of confidence in the business.’ Bank of America Merrill Lynch was Mercuria’s financial advisor during the transaction.

TANK STORAGE • December 2012

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terminal news

Statoil and Samsung to develop storage unit for Heidrun Oil and gas company Statoil has signed a letter of intent with Samsung Heavy Industries to build a permanent floating storage unit (FSU) in the Heidrun oil field in the Norwegian Sea. The contract is worth an estimated $230 million (€176 million) and gives Statoil the option to purchase two additional units in the future. The new storage unit, with an expected design life of 30 years, will replace the existing buoy loading system on the field. Samsung will carry out engineering, procurement and construction services. Engineering will start immediately and the unit is expected to be on location at the Heidrun field in the first half of 2015. ‘The procurement process was based on competition which involved world-class prequalified shipyards and Samsung presented the best overall offer, meeting Statoil’s requirements for HAS, cost and quality,’ says Anders Opedal, head of projects at Statoil. ‘Our ambition is to maintain Heidrun production at least until 2045,’ says Morten Loktu, Statoil’s head of operations on the north cluster of the Norweigen continental shelf. ‘To reach this goal we need robust systems on board and efficient and secure oil export solutions. The new storage unit will provide such an efficient and robust oil storage solution in the Heidrun area.’

Murphy Oil to open up new subsidiary Murphy Oil’s board of directors has approved a plan to open a US-based downstream subsidiary, Murphy Oil USA Inc. The move, subject to customary conditions including confirmation of the tax-free nature of the transaction and receipt of customary regulatory approvals, will create an independent, separately traded company. The spin-off of Murphy USA is expected to be finalised next year. Murphy believes that creating two publicly traded companies would offer a number of advantages. ‘Separating these two businesses will allow each to unlock its own potential for growth. We have built two strong but distinct businesses,’ chairman of Murphy board, Claiborne Deming said in a statement. ‘Murphy will be a pure-play exploration and production company with strong returns and attractive investment opportunities,

while Murphy USA will be a leading retailer with over 1,100 retail gasoline outlets.’ Steven Cossé, president and CEO of Murphy, adds: ‘We look forward to these two separate, well positioned companies growing and prospering in their respective industries.’ The board of directors also authorised a special dividend of $2.50 (€1.90) per share for a total dividend of approximately $500 million. The dividend is payable on 3 December 2012 to holders of record as of 16 November 2012. Furthermore, the board has approved a share repurchase programme of up to $1 billion of the company’s shares of common stock. Murphy may utilise a number of different methods to effect the repurchases, including open market purchases, accelerated share repurchases and negotiated block purchases. ‘These announcements are consistent with our commitment to creating value for shareholders,’ Deming adds.

Gulf Coast Asphalt plans oil terminal expansion Gulf Coast Asphalt is looking to expand storage at its Alabama, US-based oil terminal by 71 million gallons. The expansion project would see the construction of 20 new storage tanks for oil from Canada’s oil-rich tar sands. According to Gulf Coast Asphalt’s plans presented to regulatory agencies and

local officials, the oil will be shipped from Canada via railcars and then pumped from an unloading facility to the storage terminal on a new pipeline to be built under the local Mobile River. The company has already received planning permission to break ground on the pipeline. The plans have been

filed with the Alabama Department of Environmental Management, the US Army Corps of Engineers, and the city of Mobile and includes the installation of a railcar heating system. This will help to liquefy the near-solid oil so it can be pumped more easily. It is not yet known what Gulf Coast Asphalt will do with the imported oil.

Gulf Coast Asphalt will import oil from Canada’s oil-rich tar sands

December 2012 • TANK STORAGE

terminal news

VTTI considers Fujairah terminal expansion Vitol Tank Terminals International (VTTI) is considering expanding storage capacity at its terminal in the Port of Fujairah. VTTI owns 90% of the terminal, while the government of Fujairah owns the remaining 10% stake. VTTI, a 50/50 joint venture between energy trader Vitol Group and shipping company MISC Berhad of Malaysia, already operates 47 storage tanks with a 1.18 million m3 storage capacity at the port, which it says is ‘excellently placed to serve the major bunker market’. With this in mind, VTTI is looking to double capacity at the site with the addition of 1 million m3 of storage. VTTI says it could break ground on the expansion project at the beginning of 2014 once plans are finalised and permits granted. The total cost of the build has not yet been divulged.

OOC plans crude storage terminal in Duqm Government-owned Oman Oil Company (OOC) is considering building a 200 million barrel crude storage facility at Ras Markaz in Duqm, Oman. Nasser bin Khamis Al Jashmi, undersecretary at the Ministry of Oil and Gas, says the investment needed to establish one of the world’s largest crude storage facilities would be ‘big’ but divulged no other information related to financing. ‘The storage facility will be strategic as well as commercial for crude oil and other products. We are planning a storage capacity of 200 million barrels crude plus other products,’ Al Jashmi was quoted as saying. ‘We are now in the study phase of the project and it will be a phased development and a big investment. We are working hard to achieve this project.’ The company is already in talks with potential customers such as Petroleum Development Oman. ‘We are talking to some clients from neighbouring

countries and also to other companies. It will be the sole investor in the crude storage facility,’ Al Jasmi adds. OOC also announced that it is developing an $800 million (€619 million) petrochemical plant for the production of purified terephthalic acid (PTA) and Polyethylene terephthatate (PET). It is currently setting up a separate company that will make the project a reality. Based in Sohar, Oman, the plant will source its materials from the Sohar Refinery and produce 1 million tonnes of PTA and PET.

Enbridge to expand Athabasca Terminal Canadian energy company Enbridge is to build additional storage capacity at its Athabasca Terminal for Suncor Energy Oil Sands after the two companies entered into an agreement. The $150 million (€116 million) project, expected to be operational in the second quarter of next year, will provide storage for Suncor’s growing volumes of bitumen

from its Firebag 3 and 4 developments. Enbridge will build a new 350,000 barrel tank as well as additional infrastructure including new booster pumps, meters and modifications to existing piping manifolds. ‘We’re pleased to further strengthen our relationship with Suncor by delivering timely and innovative terminalling and

transportation services,’ says Steve Wuori, president of liquids pipelines and major projects at Enbridge. Suncor has agreed to support Enbridge’s investment in the expansion project through a long-term services agreement, during which Enbridge recovers all operating costs, a return on equity and all of its invested capital.

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TANK STORAGE • December 2012

terminal news

Citgo’s biofuel storage tank approved Fuel company Citgo Petroleum has been given the go ahead to build a biofuel storage tank at its existing Quincy Avenue terminal in Braintree, Massachusetts. Citgo proposed to construct a 270,000 gallon steel biofuel tank at the facility, which would hold

biodiesel made from animal and vegetable fats. Approval was granted by Braintree’s planning board on a conditional basis. Conditions state that Citgo must monitor the number of trucks headed for the proposed facility. According to Citgo, the project will have a minimal impact on the town’s traffic.

Oil storage at Johor could reach 10 million m3 Johor Petroleum Development (JPD) believes Johor could become one of Asia’s key oil storage hubs in the coming years. Expansion of facilities in Pengerang, Tanjung Bin and Tanjung Langsat will help bring Johor’s oil storage capacity to 10 million m3 between 2017-2020. According to Mohd Yazid Jaafar, chief executive of JPD, Tanjung Bin – which currently stores 840,000m3 – could hold up to 3 million m3, and Tanjung Lansat’s current 650,000m3 capacity has the

potential to reach 2 million m3. At the Pengerang complex, around 5 million m3 of oil could be stored there. Dialog, in partnership with Vopak and Johor’s government, is building an RM5 billion independent deepwater petroleum terminal facility at the site. Phase I of this project, which saw an investment of RM1.9 billion, will feature the construction of 1.3 million m3 of storage infrastructure slated for completion next year. The whole project is expected to be up and running in 2014.

Vopak completes a $1bn US private placement notes programme Vopak, the world’s largest independent tank storage provider, has issued a new notes programme in the US private placement (USPP) market for a total $1 billion (€770 million) in various currencies. The new issue consists of a senior tranche of approximately $900 million and a subordinated tranche of approximately $100 million. Thirty-seven institutional investors are participating in the new notes programme, of which 10 are new investors. The senior notes programme consists of various tranches with maturities ranging from 10.5 to 14.5 years and an average annual interest rate of 3.94%. The subordinated notes programme has a maturity of seven years and an average annual interest rate of 4.99%. The proceeds of this USPP will be made available towards the end of this year and will be

used to repay outstanding debt and for other general corporate purposes. The programme will further align the maturity profile of the outstanding debt with Vopak’s longterm growth strategy and will provide maximum flexibility under the current €1.2 billion revolving credit facility (RCF). The maturity of the RCF was extended with one additional year to up to 2017 at the beginning of this year. Citigroup Global Markets, JP Morgan Securities and RBS Securities acted as the joint agents on this transaction. ‘For our fourth USPP programme since 2001, we not only experienced a strong interest, but were also able to attract a new group of long-term investors. This reconfirms Vopak’s on-going access to relevant capital markets,’ Jack de Kreij, vice chairman of the executive board and CFO of Vopak, said in a statement.

Primestar awards EPC contract for Fujairah terminal Suitable location for oil and gas storage terminals at Kakinada Port, India: 31 acres of developed industrial land with compound wall near to Kakinada port, AP, India with 26000 MT of multiple storage tanks with A,B,C licenses for petroleum oils and vegetable oils built in 2 acres of land. 29 acres of land is vacant. The land is connected to port of Kakinada by a 100% own 9 KM – 16 Inch pipeline to transport oil products. Additional lines can be laid. Ancillary units such as Nitrogen, DG sets, Lab, Compressors for pigging including mobile compressor, automated fire system with back up water storage, truck weighing station, oil testing lab equipment are in place. Land, assets and pipeline are free of all encumbrances and land is well connected by road.

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Trading group Primestar Energy and Indiabased Leasing & Financial Services are moving ahead with their oil storage terminal in the UAE. Earlier this month the two companies awarded Indian company IOT Infrastructure and Energy Services a construction contract for the engineering, procurement and construction of the

facility, estimated to be in the region of $82 million (€64 million). To be built in Fujairah, the terminal will have a storage capacity of 600,000m3 when it comes online by mid-2014. Primestar and Leasing & Financial Services began developing the terminal after receiving funding from a consortium of banks led by India’s Bank of Baroda.

December 2012 • TANK STORAGE

terminal news

MVP to store crude oil at Gateway’s Illinois storage terminal

Marathon Petroleum is the buyer of BP’s Texas refinery

BP to sell Texas refinery for $2.5b BP is to sell its Texas City, Texas refinery and other assets to US refiner and marketer Marathon Petroleum for $2.5 billion (€1.9 billion). The agreement includes $600 million in cash, an estimated $1.2 billion for hydrocarbon inventories and a $700 million six-year earn out arrangement based on future margins and refinery throughput. In addition to the 475,000 barrel per day refinery, Marathon Petroleum will also acquire connected natural gas liquid pipelines and four marketing terminals in the Southeast US. BP anticipates the transaction, subject to regulatory and other approvals, will close early next year. Describing the sale as ‘the second major milestone in the strategic refocusing of our US fuels business’, Iain Conn, CEO of BP’s global refining and marketing business, says: ‘Together with the sale of our Carson, California refinery in August, the divestment of Texas City will allow us to focus on BP’s US fuels investments on our three

TANK STORAGE • December 2012

northern refineries, which are crude feedstock advantaged, and their associated marketing businesses.’ BP has raised over $35 billion since the beginning of 2010 through asset divestment and expects this to reach $38 billion by the end of next year. BP says it decision to divest the Carson and Texas City refineries are ‘part of a major strategic refocusing of the company’s global refining portfolio’. BP still owns around 8,000 BPand Arco-branded sites across the Midwest, Pacific Northwest and along the East Coast, and in a statement said it will ‘remain a significant retailer of fuels’ in the US. ‘This sale will reduce BP’s presence in the Southeast US, however it remains firmly committed to growing and strengthening our BP-branded retail network and the value of the BP brand east of the Rockies in partnership with BP-branded jobbers and dealers,’ says Doug Sparkman, president of the company’s East of the Rockies fuels business.

Gateway Terminals, a subsidiary of Seacor Holdings, is to provide storage services to MV Purchasing (MVP) for its Bakken crude oil from 1 December. The two companies signed an agreement, announced on 20 November, which will see MVP utilise Gateway’s intermodal storage and shipment facility in Sauget, Illinois. ‘Gateway has a proven track record of safely moving large volumes of product from rail to storage and into barge and we are looking forward to working with MVP well into the future,’ Gateway Terminals president Tim Power says. Gateway’s Sauget-based terminal can offload 100 car unit trains in less than 24 hours and is located on the Alton and Southern Railroad, providing access to all major Class I railroads. The terminal opened in 2008 and has been primarily used in clean petroleum products and fuel ethanol service. It began offering storage and transfer services for shale oil in June this year.

Vopak, Greenergy and Shell complete purchase of former Coryton refinery Independent tank storage service provider Vopak, petrol and diesel supplier Greenergy and oil company Shell UK have completed the acquisition of the former Coryton refinery. The joint venture purchased the Essex, UK-based facility from Petroplus Refining and Marketing’s administrator, PwC. The transaction, which was first announced earlier this year in June, was finalised on 28 September. The three companies will invest in the facility – to be named Thames Oil Port – and develop it into a state-of-theart import and distribution terminal for oil products, to be managed by Vopak. The new terminal initially will be able to store around 500,000m3, although this could be doubled in the future.

terminal news

Decal Panama terminal expansion almost complete Decal, a storage and handling service provider for oil and petrochemical products, says the expansion of its Taboguilla Island Terminal in the Pacific side of the Panama Canal is almost complete. Decal has invested $65 million (€50 million) to almost double capacity at the storage terminal by 181,500m3 to 356,500m3. Tanks will be able to receive heavy fuel oil, cutter stocks, diesel and marine gasoil. The project will enable Decal to handle heavier products. Pump loading rates have also been improved and barge loading capacity increased from two to a maximum of four simultaneously, or one tanker up to 7,000 dwt plus three barges at a time. It will also feature in-tank blending equipment for fuel oil and the fuel oil tanks will be heated with diathermic oil. Loading lines will be electrically traced. Regarding safety, each tank will have an overfilling prevention device independent of the level gauge. Foam

Decal spent €50 million doubling capacity at its Taboguila Island Terminal

injection will also be available. The whole terminal will be surrounded by a fire water ring fitted with fixed monitors and hydrants. Environmental protection measures include the treatment of all contaminated effluents in the existing plant. All tanks will

have a plastic layer under the bottom to avoid underground water contamination via any leakage through the base. Marine loading arms will be used instead of hoses and new skimmers will be provided.

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December 2012 • TANK STORAGE

terminal news

Vopak and SABIC to develop new storage terminal in Jubail Vopak, the world’s largest independent tank storage service provider, and Saudi Basic Industries (SABIC) have formed a joint venture to develop a new storage terminal in King Fahd Industrial Port in Jubail, Saudi Arabia. SABIC holds a 75% stake in Jubail Chemical Storage and Services Company (JCSSC) and Vopak holds 25%. The construction of the facility will be financed with the parties’ own resources and through external funds.

The new terminal, slated for completion in the beginning of 2015, will be able to store approximately 250,000m3, with the potential for expansion in the future. It will comprise around 40 commodity and specialty chemical storage tanks, complete with truck handling and ship loading facilities for five berths. The facility will help serve Jubail’s growing demand for petrochemicals and the expansion of downstream industries in the region.

Odfjell to develop storage terminal at Le Havre Port Odfjell Terminals is to develop a bulk liquid storage terminal at Le Havre port in the Haute-Normandie region of France after its project proposal was selected by Grand Port Maritime du Havre (GPMH). Planned for a 30-acre plot located along the Grand Canal Maritime, the first phase of the Greenfield terminal is thought to feature

around 200,000m3 of storage capacity. A feasibility study will be carried out in the coming months and Odfjell and GPMH aim to finalise the project details and reach an agreement on a Site Reservation Protocol by 1 April next year. Le Havre Port is one of the largest ports in northern Europe.

BP Mozambique spends $7 million on fuel terminal upgrades Oil company BP has spent over $7 million (€5.4 million) this year alone renovating its Nacala fuel terminal in the northern province of Nampula, Mozambique. The upgrades, which were originally postponed due to capital shortages, will enable the terminal to facilitate large sea-going vessels and compete with nearby ports, according to Salvador Namburete, Mozambican Minister of Energy. Namburete was reported to have said that the facility’s infrastructure enhancements will enable BP to continue supplying fuel locally and further afield as it works to meet growing demand for fuel in the nation. BP has a 16% share in the country’s oil market. ‘With the opening of the rehabilitated fuel terminal, BP will consolidate its second position on our country in fuel supply,’ Namburete was quoted as saying. Construction work at the Nacala terminal created 200 new jobs, according to BP Mozambique general director Martinho Guambe, who reportedly said: ‘This investment shows the compromise the company has in the fuel market in Mozambique, and we are determined to expand our business.’ In addition, BP is looking to upgrade its Matola-based fuel terminal in the central province of Sofala.

TANK STORAGE • December 2012

Maastank to expand storage capacity in Rotterdam Maastank is to expand its storage terminal in Botlek, the Netherlands, after signing a contract with the Port of Rotterdam Authority. Maastank is a specialised terminal for the storage and transshipment of vegetable oil and fats as well as raw materials for the oleochemical industry. The expansion project will increase the size of the terminal from 17,000m2 to 21,500m2 which will allow Maastank to enlarge its tank storage capacity from 40,000m3 to 90,000m3 in the coming years. The company currently has 48 storage tanks in operation at the Port of Rotterdam. The central Botlek Geul location of Maastank has one berth for seagoing ships and two berths for inland vessels.

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terminal news

Dutch terminal unveils new train loading station Netherlands-based Botlek Tank Terminal (BTT) has given the go-ahead for a consortium of contractors to start work on a new train loading station. The station, with two 340m tracks, will be able to load six wagons simultaneously, at a rate of 400 tonnes per hour. Construction of this new rail link will cost €2 million and take around six months. The new train loading station is BTT’s response to growing customer demand for rail transport. It will be used initially to load block trains with biodiesel and will be modified in due course to handle other oil products such as jet fuel, petrol, diesel and edible oils. Traffic will begin with two trains a week before throughput increase finally up to two trains a day.

BTT’s new train loading station comes in response to customer demand

BP agrees to fine and oil spill response improvements BP Products North America, the US EPA and the Department of Justice (DoJ) have reached an agreement regarding a notice of violation the EPA issued to BP in 2006 related to spill response training exercises conducted at the Curtis Bay product terminal in Baltimore, Maryland in 2005. The EPA lodged concerns over the training exercises, which involved no actual oil spillages, at the terminal. It alleged that BP breached state regulations which require oil storage facilities to carry out oil spill practice drills. Under the agreement, BP will pay a $210,000 (€162,600) penalty and carry out independent audits at other product terminals to assess response plans and share those results with the EPA. In addition, the company is applying best practices for oil spill response to its operating sites. ‘BP is committed to safe operations and we conduct regular emergency response exercises at our fuel terminals,’ Steve Pankhurst, president of BP Pipelines North America, said in a statement. ‘In 2005, our spill response contractor did not meet BP or EPA’s standards for rapid response during drills. This was unacceptable to us and we took action to replace the contractor.’ Oil storage facilities such as the Curtis Bay Terminal, which can store around 22 million gallons on oil, must have an oil spill response plan in place featuring staff training, spill response equipment and a worst case scenario strategy for the containment and clean-up of oil spills. ‘Since 2010, BP has strengthened and shared industry best practices for oil spill response and we are assuring that these learnings are in place in our facilities globally,’ Pankhurst says. ‘We’re sharing these best practices with EPA and putting them into action and our products terminals as part of this agreement.’ NG ER-RTR Qtr page 90x130mm 012012_V2 (Prepress)

20 15 November 2012 12:43:37

December 2012 • TANK STORAGE

terminal news

Odfjell Holding secures funds for project expansions Odfjell Holding, a subsidiary of OTLG C.V. – a joint venture between Odfjell Terminals and Lindsay Goldberg – has secured a $200 million (€154 million) five-year secured credit facility from a group of five banks. The funds are available through a five-year reducing revolving credit facility. Odfjell Holdings can also obtain increases in the principal amount under this facility of up to an additional $100 million. The owner of Odfjell Terminals Houston and the brownfield project Odfjell Terminals Charleston, Odfjell Holding will use these funds to finance expansion projects at both these sites and to refinance an existing $54 million indebtedness at Odfjell Terminals. Odfjell Terminals has broken ground on the Charleston terminal, which will have a storage capacity of 80,000m3 when it comes online next year. The company is also considering other expansion projects across North America.

Tesoro sells marine terminal and pipelines to Tesoro Logistics Tesoro Corporation’s subsidiary Tesoro Refining and Marketing has sold its Long Beach marine terminal and Los Angeles short-haul pipelines to the partnership company Tesoro Logistics for a total consideration of $210 million (€160 million). This terminal, which is located near Tesoro’s refinery in Wilmington, California, features six storage tanks with a total 235,000 barrel capacity, related pipelines with 70,000 barrels per day throughput and a two-vessel berth dock leased from the city of Long Beach. Tesoro Logistics acquired the terminal and related infrastructure for $210 million; $189 million in cash and the partnership’s equity valued at approximately $21 million. ‘The transaction marks Tesoro’s second sale of assets to the partnership and represents the first significant addition of third party volumes into the TLLP system, one of

the partnership’s primary business objectives,’ says Greg Goff, Tesoro Corporation’s president and CEO, and chairman and CEO of Tesoro Logistics. ‘We are committed to capturing the full value of our logistics assets and growing the partnership’s distributions.’ In connection with the closing of the transaction, Tesoro and the partnership entered into a throughput and use agreement for the marine terminal assets and a transportation services agreement for the short-haul pipeline assets. Both of these agreements include minimum throughput commitments, annual price escalations and 10-year initial contract terms. Tesoro Logistics expects that this contribution will result in an estimated $22 million of additional annual EBITDA, approximately half of which is expected to be from third parties.

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TANK STORAGE • December 2012

12.11.12 13:07

terminal news

ArcLight acquires Blackwater Midstream

news in brief...

Energy-focused investment firm ArcLight Capital Partners has finalised its acquisition of Blackwater Midstream. Blackwater CEO Michael Suder said the company was ‘extremely pleased to have finalised our merger and join the ArcLight group of portfolio companies’. He said the deal will allow Blackwater to ‘continue to grow and expand on the successful business plan that we have executed over the last four years’. ‘We believe low, sustained gas

Odec Tankstorage is increasing its storage capacity in a bid to handle more biofuels. The company recently acquired a 9,130m3 terminal area in Södertälje oil harbour, Sweden. The terminal is now under development and, upon completion, will feature four new tanks for biofuels storage. Phase 1 of this project is slated to begin at the end of this year and includes a 6,000m3 insulated tank for biofuels. This tank will be put into operation in mid-2013.

prices and surging crude production will result in increased bulk storage needs to serve the domestic refining,’ ArcLight managing partner and cofounder Daniel Revers was quoted as saying, adding that Blackwater is ‘poised to take advantage of the growth in downstream liquid bulk storage opportunities’. Blackwater has a 900,000 barrel storage facility in Westwego, Louisiana; 221,000 barrels of capacity in Brunswick, Georgia; and 177,000 barrels of capacity Salisbury, Maryland.

Longwei Petroleum brings Huajie fuel storage depot online Chinese energy company Longwei Petroleum Investment Holding has brought its newly acquired fuel storage depot online. Longwei’s RMB700 million (€85 million) asset purchase of Huajie Petroleum was finalised in late September. The company has since received its first shipment of petroleum to the depot and is now selling product to its customers. Included in the asset purchase is a Fanshi County, Shanxi province-located tank storage farm with a total storage capacity of 100,000 tonnes. ‘The Huajie facility nearly doubles our storage capacity to a total 220,000 tonnes and extends our reach into the fast-growing industrial region of northern Shanxi

province,’ Longwei’s chairman and CEO Cai Yongjun says. He adds the asset purchase ‘was completed using our own cash resources without dilution to our shareholders’. Longwei also acquired a dedicated rail spur, a vehicle loading and uploading station, an office building and land rights for 98 acres adjacent to the main regional rail line. ‘Closing on the Huajie facilities has allowed us to increase our regional presence and attract new customers,’ says Michael Toups, Longwei’s CFO. ‘With the addition of the Huajie facility, we have strengthened our lead as the largest non-state-owned fuel storage and distribution business in province.’

Givot eliminates storage woes with new oil tank Israeli oil and gas exploration company Givot Olam will no longer have to worry about its oil storage needs as it works to develop its Meged well, near Rosh Ha’Ayin. The company has rented a new 300,000-barrel oil storage tank – sufficient to handle increasing capacity from the well. The new lease is for two years,

due to end on 30 September 2014, but this could be extended for a further two years. The oil tank requires 36,000 barrels of oil to be operational. Above this quantity, the company can sell oil to third parties. The lease on Givot’s current, smaller storage tank is due to expire and there is no option to renew it.

Odec expands for biofuels

Tradebe Port Service terminal to come online Environmental services provider Tradebe is on track with the construction of its storage terminal in Barcelona Port, Spain. The Tradebe Port Service terminal is due to be operational at the beginning of next year when it will be able to handle 450,000m3 of clean petroleum products and fuel oil for the domestic and international markets, via access to a new 16.5m deep sea jetty. Tradebe says it could expand the terminal once the first phase comes online as its clients who supply the Mediterranean market are providing ‘good opportunities’.

IL&FS plans storage terminal in Fujairah IL&FS Prime Terminals FZC is developing a storage tank terminal in Fujairah, UAE. The terminal will comprise 15 storage tanks with a total storage capacity of 850,000 tonnes. IL&FS Engineering and Construction has been selected to build the terminal and received a Letter of Intent (LOI) for AED304 million (€64 million). The contract is for engineering, procurement and construction of the project, which is expected to take 17 months to complete.

New storage tanks proposed for Ceylon Petroleum sites Sri Lanka Ministry of Petroleum Industry is looking to build new storage tanks at two Ceylon Petroleum storage terminals. The ministry has submitted a proposal to the National Planning Department for the construction of new tanks in Kolonnawa and Muthurajawela facilities at a cost of LKR5 billion (€30 million). Under the proposal, seven tanks are planned for Kolonnawa and three would be erected in Muthurajawela. The project is slated for completion in 2015.

December 2012 • TANK STORAGE

terminal news

Vopak JV opens storage terminal in the Netherlands Vopak Terminal Eemshaven, a 50/50 joint venture between Vopak and NIBC European Infrastructure Fund (NEIF), was opened at the beginning of October. Operated by Vopak, the new terminal for strategic oil reserves has a storage capacity of 660,000m3 serving the Netherlands and other EU member states. This initial storage space, which is made up of 11 60,000m3 tanks, has been leased out for a long-term period but there is potential to expand the terminal to be able to store a total 2.76 million m3 in future. It also features a jetty for sea-going vessels. Marijke van Beek, Major

of Eemsmond; Harm Post, director of Groningen Seaports; Jeroen Drost, NIBC chairman and CEO; and Eelco Hoekstra, CEO and Chairman of the executive board of Royal Vopak were present for the terminal’s inauguration. Van Beek comments: ‘The arrival of Vopak is for me a symbol of the strength and growth of Eemshaven, an energy port approaching maturity.’ Post describes the new storage terminal as ‘a very interesting addition to our existing energy initiatives’,

position in oil logistics’. Designed and to be operated in compliance with European and Dutch environmental standards,

built for strategic oil reserves and it was developed after constructive consultation with all stakeholders, including NGOs, which

while Drost believes the facility represents ‘another important step for the Netherlands in maintaining a leading global

the terminal brings Vopak’s worldwide network of tank storage terminals to 84. ‘For Vopak this is the first terminal

was particularly important in light of the proximity to the “Waddenzee” nature reserve,’ says Hoekstra.

TANK STORAGE • December 2012

Vopak Terminal Eemshaven

terminal news

Shell withdraws business from Odfjell Terminals Rotterdam Oil company Shell has ended its storage contract with Norway’s tank storage company Odfjell Terminals Rotterdam (OTR) and will withdraw its business from the terminal, located at the Port of Rotterdam. The decision, of which Odfjell was informed in August, came about after the terminal was shut down on 27 July for breaching safety standards. At the time of the closure, Odfjell Terminals’ interim president Ake Gregertsen said: ‘Odfjell is determined to improve integrity of the terminal in order to ensure safe operations. It is our commitment to do whatever is necessary to bring OTR back up to industry standards.’ However a spokesperson for Shell Netherlands said Shell ‘offered Odjfell a period of 30

days to cure the breach to which they did not respond’. ‘Today they are still in breach of material obligations, we see no improvement of their performance and have no reason to believe that a substantial improvement of performance of releationship can be made in the short term. We have therefore informed Odfjell we have terminated the agreement as per 11 September 2012,’ the spokesman was quoted as saying. It is not yet known if Shell will take legal action against OTR for this breach of contract. Nevertheless, Shell says the withdrawal will not affect its customers as it has already secured alternative storage in Rotterdam, Antwerp and Amsterdam.

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December 2012 • TANK STORAGE

terminal news

JV oil storage terminal in Fujairah already underway Ground has broken on a new oil storage terminal in Fujairah. IL&FS Prime Terminals, a joint venture between IL&FS Maritime Infrastructure Company (IMIC) and PTF, are investing Dh477 million (€100 million) into the new facility. IMIC will own 80% of the terminal and operate the 14 storage tanks, with PTF owning the remaining 20%. Phase I of the project,

construction of which is already underway, will see 333,088m3 of the total 632,678m3 storage capacity built within two years’ time. Contracting company ANC Foster is currently conducting earthworks for the tanks. Shahzaad Dalal, chairman and CEO of IL&FS Investment Advisors, was quoted as saying: ‘The main construction package is

currently in tendering phases. Three consortia have placed bids for the project.’ The land on which the oil terminal will be built is being leased from the government of Fujairah under a 50-year contract. Dalal expects a full return on investment within eight to 10 years. ‘The project marks an important step for IL&FS as it seeks to expand its

expertise in developing, executing and managing BOT infrastructure projects in the fast growing Middle Eastern and African markets. As there is a great need to develop infrastructure in these regions, many governments are turning to experienced private sector players, who can efficiently implement projects,’ Dalal was reported to have said.

Gibson Energy to increase storage at Hardisty Terminal Midstream energy company Gibson Energy is to expand its Hardisty Terminal in Alberta, Canada and will begin with the construction of two oil storage tanks. With a total storage capacity of 800,000 bbls these two tanks ‘will form the initial anchor for an expansion of the facility’. Site preparation for the two 400,000 bbl tanks is scheduled to start by the end of this year, with commissioning expected for early 2014.

The new tanks will be connected to third party receipt pipelines and facilities and will have connectivity to all current export pipelines from Hardisty. ‘This initial development on our eastern lands at Hardisty Terminal starts to take advantage of the company’s strategic 184-acre undeveloped land position in the area,’ says Rick Wise, Gibson’s senior VP of operations.

‘We expect continued growth at our Hardisty Terminal as oil sands and conventional oil production continue to develop at an accelerated pace.’ In similar news, Gibson has signed a letter of intent with a unit train developer to explore unit train shipments from the Hardisty area. The proposed facility would use Canadian Pacific’s North Main Line for transporting crude by rail to markets across North America.

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terminal news

CN and Tundra Energy sign MoU Canadian National Railway Company (CN) and crude oil company Tundra Energy Marketing have signed a Memorandum of Understanding to build a crude oil railcar loading terminal near Cromer, Manitoba in Canada. The new terminal will begin loading 30,000 barrels per day of crude oil into rail cars in the second quarter of next year, helping to benefit Bakken crude oil producers in Manitoba and Saskatchewan. ‘The Cromer transload terminal is expandable, with the potential to handle complete crude oil unit trains of more than 100 cars, which will generate greater efficiencies and market reach for Canadian crude oil,’ says Jean-Jacques Ruest, CN executive VP and chief marketing officer. Tundra Energy president, Bryan Lankester, adds: ‘This project, combined with 410,000 barrels of oil storage currently under construction at our terminal in Cromer – a six-fold increase in existing

The terminal will benefit Bakken crude oil producers in Manitoba and Saskatchewan

capacity – will provide us with access to alternative North American markets for Williston Basin crude oil over CN’s network at a time when there is inadequate pipeline takeaway capacity.’

Ruest comments: ‘We expect to move more than 30,000 carloads of crude oil in 2012, and we believe we have the scope to double this crude oil business next year.’

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December 2012 • TANK STORAGE

terminal news

Norterminal plans oil terminal in Finnmark, Norway Norterminal is looking to develop a strategic new oil terminal in Norway’s Finnmark. Norterminal plans to break ground on the NOK1.52 billion (€205-273 million) terminal in 2016 depending on municipal proceedings and development plans. The terminal will be able to store 1 million m3 of crude oil in both storage tanks and caverns when it comes online. It will be able to receive between 150 and 300 tankers of up to 300,000 dwt each year with the ability to ship around 10 million

tonnes of crude oil annually. ‘Development of new oilfields in the Barents Sea and the opening of new shipping lanes from Russia and Norway makes Finnmark a strategic and suitable place for interim storage of oil,’ Norterminal’s owner Jacob Stolt Nielsen was reported to have said. ‘We believe Gamneset is the best location, in SorVaranger. We are in a dialog with several Russian companies but we can’t yet comment on which companies they are. But the response so far has been good.’

Cancen finalises acquisition of Kinsella facility In Canada, energy services company Cancen Oil Canada has finalised the acquisition of Astra Energy Canada’s Kinsella crude oil terminal and blending facility located in Hardisty, Alberta. Cancen initially announced the agreement in May earlier this year. Cancen purchased the facility for $5 million (€4 million); $4.5 million cash and a $500,000 promissory note bearing interest at prime plus 2% secured against the facility. The terminal is connected to the Inter Pipeline Bow River pipeline system in Alberta’s Beaver County and the blending facility can blend and store 500m3 a day of sweet, sour and heavy clean crude. It was originally put into operation in 2004, serving producers based in west Canada. Tank Storage magazine previously reported that Cancen planned to enhance the facility the treat waste oil and handle wastewater, while keeping capacity the same.

TANK STORAGE • December 2012

Finnmark is an ideal location for Norterminal’s new facility

Magellan’s De Moines biodiesel terminal online Magellan Midstream Partners’ biodiesel storage and blending terminal is now operational in Des Moines, Iowa. The facility can store and mix 5,000 barrels of 2%, 5%, 10% and 20% biodiesel blends. The 5,000 barrel storage tank is heated, insulated and features an accompanying pipeline network to the track rack that is also heated and insulated.

‘This system offers our customers accuracy, quality and a variety of biodiesel blend options,’ Shawn Baker, Magellan’s director of transportation and marketing, was reported to have said. Magellan now offers biodiesel blending across 11 terminals. Its De Moines terminal was partly financed by funding from the US DoE.

Consortium buys 70% remaining stake in LBC Terminals Jersey The remaining 70% of LBC Terminals Jersey has been acquired from Challenger Infrastructure Fund and Challenger Life. Advised by Access Capital Advisers, a consortium made up of Dutch pension fund asset managers APG Algemene Pensioen Groep, PGGM and Australian superannuation investors purchased the 70% stake for $297.5 million (€233 million). The completion of this transaction follows the parties signing a binding sale and purchase agreement in June and obtaining European Commission (Competition DG) clearance. Access has been managing the interests in LBC for its clients –

Australian superannuation investors – since 2007 and will now manage the investment for all investors under an agreement with LBC. ‘At a time when there are significant risks on the global economic horizon, assets such as LBC that provide good returns through the economic cycle are a good fit for pension fund investors,’ says Graham Matthews, chief investment officer at Access Capital Advisors. ‘The acquisition valuation is equivalent to a multiple of 9.3 times the expected FY13 earnings for LBC,’ comments Stephen Burns, Access’ head of Europe. Baker & McKenzie was the consortium’s legal adviser.

terminal news

South Korea to get new fuel storage hub

The South Korean oil hub will be developed in Ulsan

Alyeska’s storage tank inspection waiver revoked In Valdez, Alaska, Alyeska Pipeline Service is working to reinstate a waiver originally issued by the Department of Environmental Conservation (DEC) that would delay an inspection of one of its crude oil storage tanks. Following a request submission, DEC awarded Alyeska a two-year waiver in February that would postpone an internal inspection of Valdez Marine Terminal’s Tank 5 until mid-2014 – and increase the time between such inspections from 10 to 12 years. In May, however, the DEC withdrew the waiver, which was granted subject to Alyeska agreeing to six conditions, claiming the company failed to comply with conditions relating to corrosion control. Under the agreement, Alyeska agreed to provide regular ‘rectifier logs’ to DEC as proof of the continuous operation the cathodic protection (CP) system. According to the letter issued by DEC on 23 May, while Alyeska did provide the logs as required, data revealed the CP system was operating correctly just 26% of the time during a six month period ending mid-April. ‘Stated differently, the CP system was not operated correctly 74% of that time,’ the letter said. The letter went on to say that Alyeska failed to explain ‘why technicians failed to recognise, investigate or correct’ the faulty system. ‘There is no indication that Alyeska personnel recognised the significance of the problem until contacted by the department engineering staff about the rectifier logs,’ the DEC was reported to have said. As a result, the department has ordered Alyeska to take Tank 5 out of service and have it internally inspected before 31 December 2012. Since its revocation, Alyeska is pursuing the reinstatement of the waiver. In a letter sent to DEC on 7 June, Alyeska’s operational director of the Valdez terminal Scott Hicks wrote: ‘Alyeska acknowledges that some deficiencies occurred in the Tank 5 rectifier monitoring and CP maintenance programmes between October 2011 and April 2012, and we take these deficiencies very seriously.’ Alyeska operates the Trans-Alaska Pipeline System and the Valdez Marine Terminal, which comprises 18 510,000 barrel storage tanks measuring 250ft wide and 63ft high. Not all the tanks are operational today as oil flow via its pipeline has fallen by more than two-thirds from the 2.1 million barrels a day in 1988.

Korea National Oil (KNO) is set to start work on a new oil storage and trading hub in Ulsan, South Korea in 2013. KNO CEO Suh Moon-Kyu has been quoted as saying the hub is an ‘important project’ and Ulsan will provide good transport links to countries likes Canada and the US. KNO says the hub will consist of two terminals and have a total storage capacity of 28.4 million barrels, including a 9.9 million barrel terminal for petroleum products and an 18.5 million barrel terminal for crude oil. Moon-Kyu adds that several high-profile companies have expressed an interest in investing in the project, of which it aims to have the tanks for petroleum products completed by 2016.

HPCL relocates to Ennore India’s energy company Hindustan Petroleum (HPCL) has built a new oil storage terminal in Ennore, Chennai to replace its existing, discontinued Tondiarpet-based facility. The terminal cost Rs330 crore (€47 million) to construct and comprises 20 aboveground storage tanks with a total capacity of 140,000KL. Four 10,000KL tanks are dedicated to the storage of motor spirit; six 10,000KL tanks have been set aside for high speed diesel; there are four 5,000KL capacity tanks for superior kerosene oil and aviation turbine fuel will be held in four 5,000KL tanks. Located on 108 acres of Salt Department-owned land, the facility also features rail, road and port access from which it can receive and dispatch

these petroleum products from Ennore Port across Tamil Nadu. This new storage terminal replaces HPCL’s existing 15-acre terminal in Tondiarpet, which had a storage capacity of just 50,000KL. The petroleum products have been relocated from Tondiarpet to Ennore on a phased basis. The new Ennore-based terminal is due to begin operations shortly. Twenty-one kilometres of pipelines have been laid, connecting HPCL’s terminal to Ennore Port. This includes 20” for high speed diesel and 16” for both motor spirit and superior kerosene oil. The fuel will then be transported the remaining distance to eight districts – Chennai, Tiruvallur, Cuddalore, Kancheepuram, Vllore, Tiruvannamalai, Puducherry and Villupuram – via tankers.

Baltic Oil Terminals finalises name change Tank terminals company Baltic Oil Terminals has completed the process to change its name to Pan European Terminals. The company held its Annual General Meeting on 14 August where it proposed to its shareholders ‘Resolution 7: Change of the company’s name’, from

Baltic Oil Terminals PLC to Pan European Terminals PLC. The company obtained shareholder approval and the change of name has now been completed. Pan European Terminals’ shares began trading on AIM under ‘PAN’ at 8am on 4 September. The ISIN number remains unchanged.

December 2012 • TANK STORAGE

technical news

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technical news

Integrating wireless communication with the evo 2600 radar gauge is convenient, easy and efficient. When utilized with wireless communication, the evo 2600 radar gauge will transmit level and temperature signals back to the wireless base station, which will then send the information gathered back to the inventory management system. L&J engineering also offers the MCG 2150, the industryâ&#x20AC;&#x2122;s only handheld infrared calibrator, for an easy 5-step setup operation through the radar or optional MCG 1350 Ground Level Display. The Integrated antenna and radio modem design eliminates hardwired cable and conduit connections to the control room using automated wireless gauging for local and remote tanks. Cost effective installation is one of the major advantages to using wireless networks for level gauging applications. Wireless field networks are easier and less costly to install than traditional wired systems. For difficult applications and others that require a need for advanced technology, L&J engineering has the solution.

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technical news

Keighley Lab ensures welds are fit for purpose Weld testing and inspection service provider Keighley Laboratories based in Yorkshire, UK, offers procedure consultancy and approval, welder qualification tests, onsite weld investigation and, through its newly updated test house, a range of destructive, non-destructive and metallography testing facilities. Keighley Labs is UKAS accredited for weldment testing and certification across a number of professional specifications, including relevant commercial BS, EN ISO and ASTM standards. Keighley Labs, whose team covers all forms of welded joints, employs an array

of test and inspection procedures to qualify welding procedures, welding operators and welding processes by examining completed welds to establish their quality, integrity and compliance with specifications. Non-destructive testing techniques extend from visual inspection to check for surface defects and weld sizes, to magnetic particle, liquid penetrant and ultrasonic examinations for detecting surface and near-surface discontinuities invisible to the naked eye, locating weld leaks and any internal flaws in addition to meeting specific codes and specifications.

Weld coupons are also examined for soundness, strength and toughness using a range of mechanical testing equipment in Keighley Labs’ on-site test house, which includes a dedicated CNC machine for producing weld test plates from customer-submitted samples. In its newly-enlarged optical suite, Keighley Labs offers metallographic inspection of sections of welded joints, at macro levels up to 50x magnification and micro examinations up to 1000x. Metallurgy is used to check the extent of the heat affected zone and any weld defects such as cracks, pores, swivels and lack of fusion.

A&A bags ABP response contract

A&A has been selected by ABP for a pollution contract

Adler and Allan (A&A), a UKbased environmental response group, has been awarded a tier 2 marine pollution response contract from Associated British Ports (ABP), Britain’s largest port operator. The three-year contract commenced August 2012 and will be for tier 2 pollution response and hazardous and noxious substance cover on a rapid mobilisation

24/7, 365 days a year basis. A&A will also run exercises for ABP as part of its training capabilities. APB owns and operates 21 ports in England, Scotland and Wales, managing around a quarter of the UK’s sea-borne trade. The company’s activities cover transport, haulage and terminal operations, ship’s agency, dredging and marine consultancy.

Agrosy selects Emerson’s flow meters Argosy Technologies, a provider of equipment and technology to oil and gas companies in Russia and the CIS, has installed new flow meters from Emerson Process Management as part of its new loading/unloading and fuel dispensing systems. Emerson’s Micro Motion Elite Coriolis flow meters supply accurate, real time, in-line measurement data and provide users of the new custody transfer systems with high measurement performance and maintenance-free operation, even in demanding operational environments. The new Argosy AT loading/unloading systems measure petroleum and liquefied chemicals during bulk discharge and loading for transportation and storage. Argosy has also added the new AT fuel dispensing station for vehicle refuelling at petrol and pumping stations. Micro Motion Coriolis flow meters can be supplied with a Russian GOST Verification Certificate and are ideally suited to custody transfer applications where high accuracy is required. They have no moving parts, enabling the meters to deliver improved system reliability and increased plant availability. Additionally, Micro Motion meters do not require straight pipe runs or flow conditioning devices, enabling compact and efficient skid-based metering designs.

TANK STORAGE • December 2012

Agrosy Technologies is using Emerson’s Micro Motion Elite Coriolis meters

technical news

ECD gets a whole lot more sensitive Petroleum refiners must monitor and treat naturally occurring H2S that contaminates water in their operations in order to meet regulatory limits. Removing H2S from the water is done through air stripping that eliminates the sulphur or oxidation reactions that convert the sulphides to sulphates. Stripping is essential due to both the toxic environmental and corrosive effects on equipment of sulphides. The S10 and S17 pH sensor product family from Electro-Chemical Devices (ECD) – a manufacturer of liquid analytical process instrumentation – monitor pH in water-based solutions.

The S10 and S17 product line features a pH range of 0 to 14 at temperatures from -5 to 130°C and survives pressures up to 300 psi at 25°C. It has been tested to sulphide ion concentrations of up to 25 ppm. Both models consist of two sensor designs and replaceable electrode cartridges. The S10 sensor is an immersion or an insertion style sensor, while the S17 is a valve retractable style sensor. They are fully re-buildable and feature a 316 stainless steel body that incorporates the sensing cartridge, a temperature module and a signal conditioner with cabling. These cartridges provide specific solutions for the measurement of pH, ORP,

The S10 and S17 sensors from ECD comprise two sensor designs and replaceable electrode cartidges

specific ion (pION), dissolved oxygen, conductivity and resistivity in a range of industrial process applications. The pH and ORP cartridges are available with either Radel (PES) or PEEK construction configurations with full crown, double or single tine style pH bulb protection. The pION cartridges with solid state, glass or PVC sensing membranes are suitable for continuous online measurement. The DO electrode is a galvanic cell with a lead anode, silver cathode and Teflon membrane. The conductivity and resistivity electrodes are designed in both contacting and toroidal sensor configurations for application flexibility. The S10 sensor is designed with a 0.75” MNPT compression fitting as the process connection. This construction feature allows a variable insertion length to accommodate installation in pipe tees, flow cells or through tank walls. If the trunk fitting is reversed, the sensor can be installed in a pipe for submersion in a tank. The S17 Sensor is designed with a 1” MNPT ball valve, a 1x0.75” reducer and a 0.75” MNPT compression fitting to provide the process connection. Loosening the compression fitting allows the sensor to slide freely through the ball valve for insertion either into the process or retraction from the process. Once the sensor is retracted, the ball valve can be closed and the sensor can be removed for maintenance or replacement without shutting down the process line.

Ipco adds to vapour portfolio Environmental solution provider Ipco Power BV, the exclusive European representative of Purgit USA, had added a new vapour recovery system to its vapour processing technologies. The Purgit Refrigerated Vapour Recovery System (RVRS) is a flexible solution for the reduction of VOC emissions, available in mobile and fixed versions. The system recovers clean product from the vapours without reportable emissions. It uses a proprietary system that condenses and recovers tank vapours. Depending on the application, Purgit’s

condensers are capable of recovering over 99% of the VOC. The RVRS is able to cool down the vapours to approximately -120°C. For tank loading/ discharging, the Purgit system can be geared to draw displaced vapours out of the tank with a blower and then push them through condensers. The VOCs are condensed back to their liquid phase and transferred to a holding tank or inserted right back into the cargo fill line. The RVRS system is designed to degas atmospheric or inert tanks and barges (low or zero O2)

The RVRS is available in mobile and fixed versions and keep it inert throughout the operation. Drawing VOC vapours out of the tank, the system condenses and removes the hydrocarbons from the vapour stream, returning only the noncondensables to the tank.

Close Loop Tank degassing with the RVRS is safe and the tank can be inerted during the process. Condensing and removal of the VOC in the tank or barge will continue until the required LEL level is reached.

December 2012 • TANK STORAGE

technical news

Gerab to cash in on $850bn energy sector in Abu Dhabi An estimated $850 billion (€664 billion) is expected to be pumped into the Middle East’s energy sector in the next few years. Pipe and pipe fittings supplier Gerab National Enterprises believes it is well positioned to capture a significant slice of this investment in the region. Gerab’s pipe and allied components portfolio consists of flanges, fittings, valves, gaskets and stud bolts. It has offices worldwide in locations such as Houston, Dammam, Muscat, Abu Dhabi, Doha, Kuwait and Hyderabad. This year the company has enhanced its valves automation segment through the introduction of additional services such as hydro testing facilities, valve retrofit solution and other automation services. According to the company’s COO R Venkata Subramanian, Gerab has the ‘expertise and capabilities to meet the demands of clients in the oil and gas industry’. He continues: ‘We are well positioned to catch a major chunk of the estimated $600 billion investment in the Middle East oil and gas sector and another $250 billion investment expected in the Middle East and North Africa region’s power sector.’

TANK STORAGE • December 2012

Magnetrol introduces new GWR technology Magnetrol International’s new guided wave radar (GWR) transmitter is a level control solution that advances GWR technology with improved performance for a wide range of level and interface control applications. The Eclipse Model 706 GWR is designed to provide improved accuracy, reliability and safety for many process industries. Its innovative GWR circuitry achieves high transmit pulse amplitude and improved receiver sensitivity, resulting in a signal-to-noise ratio that is nearly 300% higher than competitive GWR devices. Unlike other GWR transmitters that use algorithms to infer level readings in top-of-the-probe dead zones, the Eclipse Model 706 measures true level to within specification up to the process flange. Coaxial and single rod overfill capable probes can be installed in various configurations on the vessel, even when the risk of flooding exists. The LCD diagnostics of the new model convey real time waveform and trend data, and can be preconfigured online prior to shipment to ensure plug-and-play transmitter commissioning and automatic capture of echo curve during upsets. It provides safe, efficient and cost-effective liquid level and interface control and is virtually unaffected by fluctuating process conditions including density, dielectric, viscosity and specific gravity.

technical news

Valve meets flow requirements for crude oil tank cars Midland Manufacturing, a North American developer of railroad tank car safety valves and equipment, and a division of the OPW Fluid Transfer Group has released a new valve. The new Hi-Flow Pressure Relief Valve, model number A-22075 has received full Association of American Railroads certification. The valve has been designed to exceed the new higher flow requirements for Packing Groups I and II commodities transported in rail tank cars of 30,000 gallons or more. This requirement includes crude oil and ethanol, the two largest commodities. Midland’s new A-22075 valve is available in all standard mounting configurations for new car builds or The A-22075 Hi-Flow Pressure Relief Valve from Midland retrofit applications.

Terminal info available on your mob International consulting and software company Implico has launched a new app for its OpenTAS product range, aimed at refineries and tank storage providers working with the terminal management and terminal automation system. OpenTAS TFM (Tank Farm Management) provides users from management, sales and operations with real-time information about inventory levels and movements at their own depots. OpenTAS TFM provides users with instant access to information about their tank farms via their iPhone or iPad. They can check fill levels, for example, or obtain details of specific inward and outward movements for all four modes of transport – tank truck, railroad tank car, ship and pipeline – and for all customers who have products in storage. App users can see the inventory levels by customer of every product in each of the tank farm’s tanks. The app uses a web service to connect to an OpenTAS system at Implico in Hamburg where the demo data is held. Subsequent access to actual terminal data can be configured to take into account specific customer requirements, such as a display that complies with corporate design guidelines, for example. If required, users can also use the app to obtain other data from the OpenTAS system, including information on tank truck drivers.

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technical news

Blast and ballistic resistant material under development A number of industry players have joined forces on a research project that seeks to develop an alternative, costeffective, lightweight material structure for increased blast and ballistic survivability. A material of this type has potential benefits to the oil and gas sector due to the intrinsic requirements of blast protection.

BAE Systems, QinetiQ, Aigis Blast Protection, TPS, Permali Gloucester, Mira, Sigmatex and the University of Nottingham have formed LiMBS (Lightweight Material and Structures for Blast and Ballistic Survivability). Co-funded by the government-backed Technology Strategy Board, LiMBS aims to develop

Honeywell looks sweet after Eni deal Italian energy company Eni S.p.A is to produce renewable diesel in Italy after deciding to invest in a project that would produce renewable fuel at its Venice refinery. Eni will retrofit existing equipment at its facility, currently being used to produce petroleum-based diesel. The project will use Honeywell’s UOP/Eni Ecofining process, which produces drop-in replacement for traditional diesel. This Honeywell Green Diesel offers a lifecycle reduction in greenhouse emissions by as much as 80% compared with diesel derived from petroleum. It also offers high energy density and performance at cold or warm temperatures. Eni will produce more than 100 million gallons a year of renewable diesel at its Venice facility beginning in 2014. In addition to technology licensing, Honeywell’s UOP and its affiliates will provide basic engineering, specialty equipment and training for the project. Honeywell’s UOP and Eni jointly developed the UOP/Eni Ecofining process, which uses hydroprocessing technology to convert nonedible natural oils and animal fats to renewable diesel.

TANK STORAGE • December 2012

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are to develop materials that have an areal density significantly less than Rolled Homogeneous Armour (RHA), offer similar blast and ballistic protection to RHA, are capable of cost-effective manufacture, assembly and repairs, reduce spall fragment spread when overmatched and are suitable for new build and retrofit.

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technical news

Asco Numatics launches stainless steel pulse valve Fluid automation company Asco Numatics has introduced a stainless steel version of its aluminium pulse valve for use in dust collector systems. The 316L CF8M stainless steel valve is certified to ATEX Category II 2G/D Zone 1 and 2 for explosive areas and has been introduced to meet the growing demand for valves for challenging environments in the oil and gas industries, in addition to the plastics, food and chemical sectors. The valve has the same features as the existing aluminium version and is suitable for control with either remote Asco pilot valves or an integral solenoid. Available

as ¾”, 1” and 1½” threaded versions, the patented piston design substantially reduces the stroke volume while still enabling high flow rates. This reduces the amount of air to be exhausted, resulting in faster operation and enabling savings to be made in compressed air production. The Quick Mount connections provide easy installation by eliminating the need for threaded piping, thereby reducing the chance of misalignment. Built-in silencers reduce noise and prevent foreign particles from entering the valve. The series 353 pulse valve is part of a complete range

of dust collector products from ASCO Numatics that includes pulse valves, pilot valves, pilot boxes, sequential controllers, pressure differential modules, tank systems and air preparation equipment.

Asco Numatics series 353 pulse valve is ideally suited to challenging environments

MTG develops new antenna

The low water pressure of Enviroco’s Eclipse system minimises risks

Industry welcomes new tank cleaning system Waste management company Enviroco has completed the first trials of its new tank cleaning systems. Eclipse is a remotely operated tank cleaning system designed to reduce the number of man-entry hours spent cleaning storage tanks. Using a high water flow rate, at a low pressure, the system minimises the risks associated with high pressure water in confined spaces. The system’s water recycling capabilities give it added environmental benefits, while

its improved efficiency provide for faster turnaround times. The trial of the first unit produced positive results and three units have been ordered off the back of them, due for delivery in April next year. The three new units are designed specifically for offshore use but have onshore capabilities. Eclipse is currently in operation in Scotland, with plans in place to roll out the system across the UK and internationally when the new systems are delivered.

UK-based Motherwell Tank Gauging (MTG), a provider of tank gauging and overfill protection products to tank storage facilities and refineries, has developed a new radar gauge antenna. This latest radar gauge antenna development has resulted in a 2” Stillwell solution for radar gauging and an enhanced MTG parabolic antenna. Both options allow accurate product measurement +/-1mm, even when gauge mounting positions are restricted or are close to the tank walls. Both walls allow in-service installation with no disruption to the operation of the tank and can be retrofitted to existing MTG radar gauges. MTG continues to develop its NT5000 Tank Monitoring System Software and is now able to provide considerable savings with installation cost and time compared to a regular hard wired installation. This option provides high integrity, long range radio communication. The gauging system’s robust functionality is maintained with options for valve and pump control, interfaces to third party level gauging equipment, with transfer of vital alarms to mobile phones or via email and data transfer to higher level DCS, TA or financial systems. To complement the company’s tank gauging system solutions, MTG also offers independent high level alarm systems and overfill prevention systems. For overfill prevention MTG offers its SILGuard, a safety instrumented system specifically for use in bulk liquid gas storage facilities. This technology is suitable for a range of modern storage tank designs; sensing and automatically responding to any tank nearing overfill conditions. The SILGuard provides a standalone safety function as part of or separate from existing tank gauging equipment.

December 2012 • TANK STORAGE

technical news

Tepsa obtains the AEOF certification Spanish bulk liquid terminal operator Tepsa has obtained the Authorised Economic Operator certification (AEOF) in customs simplifications and safety and security, based on the EU regulation CE 2913/92 and reviewed with CE 648/2005 and CE 1875/2006. Tepsa hopes the certification will enable it to contribute in facilitating the transit of goods and increasing the safety and reliability of the entire supply chain. It is one of the first terminals in Spain to be awarded the certification – recognition

Tepsa has been recognised for efficient management with the AEOF certification of the efficient management focused on contributing to customer logistics.

The company owns storage terminals in the major ports of Spain including Barcelona,

Bilbao, Tarragona and Valencia. Its total storage capacity is around 890,000m3.

Sherwin-Williams extends coatings range

Alfa Laval acquired Gamajet earlier this year

Gamajet’s service programme open to Toftejorg customers Gamajet Cleaning Systems is now responsible for both Gamajet and Toftejorg tank cleaning equipment. Under the agreement, Gamajet is responsible for Toftejorg service and repair, as well as sales of new machines in North America, and is part of the Alfa Laval acquisition of Gamajet that took place earlier in the year. Alfa Laval purchased Danish company Toftejorg in 2003. The move will enable customers of both brands to take advantage of Gamajet’s service and repair programme which offers personal support and 24hour turnaround times. Users of both Gamajet and Toftejorg tank cleaning machines can send in their equipment

TANK STORAGE • December 2012

for repair or preventative maintenance. The programme offers: • Tear down of machine and ultrasonic cleaning • Detailed inspection and quotation • Reassembly and hydraulic testing • Renewed one year warranty • 24-hour turnaround. Gamajet’s rotary impingement tank cleaning machines combine pressure and flow to create high impact cleaning jets. Cleaning occurs at the point in which the concentrated stream impacts the surface. It is this impact and resulting tangential force that radiates from that point and blasts contaminants from the surface, scouring the tank interior.

Sherwin-Williams, a coatings supplier to the oil and gas market, is launching its next generation of passive fire protection and cryogenic spillage protection technologies. The new M90/02, M93/02 and M89/02 are extensions of SherwinWilliams’ existing Firetex range of intumescent and insulation coatings. The M90/02, with an improved char strength and reduced dry film thickness, covers a range of steel sections and provides a solution for protection against both hydrocarbon pool and jet fires. As part of the series, the M89/02 thermal insulator protects against both sub-zero and elevated temperatures, allowing the epoxy fire proofing to be applied on storage tanks and vessels with contents higher than 80°C. Used together the duplex system offers protection against cryogenic spillage and hydrocarbon fire, as well as corrosion. Gordon Bell, GM of protective and marine EMEA at SherwinWilliams says the company is extending its product portfolio now that Leighs Paint is a new member of the company.

technical news

Vopak taps in to Lend Lease’s expertise

Farris Eng. offers new PRV monitor

Lend Lease has been an awarded an EPC contract for a bitumen storage facility for Vopak Terminals in Sydney, Australia. The contract includes the design, procurement, construction and pre-commissioning of three storage tanks and a ship unloading facility at Port Botany. It also includes a 1.2km insulated and heat-traced pipeline, a ship hose connection and an import distribution manifold. Also included in the contract scope is design and construction of a storm water and wastewater treatment system, heating systems for the tanks and in plant piping, a truck loading facility, a blending system and electrical, instrumentation, control, fire and security systems. Upon completion, expected for Q4 2013, the terminal will be able to store three grades of bitumen and will operate 365 days a year. ‘Our specialisation in electrical, mechanical and piping design and construction is utilised in the construction of fuel terminals, complex chemical plants and gas fired power stations across Australia,’ MD for Lend Lease’s infrastructure services business David Marchant says.

Farris Engineering, a business unit of valve manufacturer CurtissWright Flow Control Company, is introducing a new pressure relief valve (PRV) monitor. The Farris SmartPRV, a 2600 series PRV equipped with a Fisher 4320 position monitor, monitors PRVs in real time, providing feedback during an overpressure event. Areas of the plant which can prove difficult to track using traditional wired products can now be effectively monitored. The SmartPRV also extends the range of field applications with Emerson’s SmartWireless solutions network, including critical assets. SmartPRV identifies production and profitability losses, reduces emission fines and associated administrative costs and improves plant safety and environmental performance.

ITT ‘pumped’ to buy Bornemann Technology solution provider ITT has signed an agreement to acquire Joh. Heinr. Bornemann GmbH (Bornemann Pumps). Headquartered in Germany, Bornemann Pumps is a global provider of pumps and systems with an international installed base of multiphase pumping systems for the oil and gas industry. The company’s fiscal 2012 revenue is estimated at €115 million. The transaction, valued at €206 million, would be funded from the company’s cash and is expected to close by the end of this year, subject to customary closing conditions, including appropriate regulatory approvals. ITT’s president of industrial process business Robert Pagano Jr, says: ‘Bornemann’s twin-screw technology and multiphase applications experience would align strategically with the industrial process business, complement our Goulds Pumps brand and expand ITT’s presence in upstream oil and gas production.’

The SmartPRV monitors PRVs in real time

Knowsley SK signs EFA with Shell Knowsley SK, a Manchester, UK-based designer and manufacturer of fire safety equipment and systems and part of SK FireSafety Group, has signed a five-year enterprise framework agreement (EFA) with Shell. The agreement incorporates the design, supply and maintenance of Shell’s fire safety equipment and systems, covering all upstream and downstream operations

within Europe, the Middle East and Africa. The agreement will see Knowsley SK work to ensure all the facilities have the latest fire safety equipment and systems available and maintained, with a high level of standardisation across all the various sites. The agreement will also include the training of site personnel and the provision of engineering services associated with fire system design.

Franklin Fueling Systems acquires Flex-ing Fuel management systems company Franklin Fueling Systems, and a wholly owned subsidiary of Franklin Electric, has acquired Sherman, Texas-based Flex-ing. Flex-ing manufactures stainless steel flexible hose connectors, composite manhole covers, dispensing hoses, as well as other

storage tank hardware and accessories. The acquisition will help Franklin add to its product range. Notable new additions to its portfolio include a line of fire-rated flexible pipe connectors, a line of lightweight composite manhole covers and several conventional hose options.

SGS tank inspection in Liberia complete SGS has completed the inspection of two idle tanks in Liberia. Second Harbor Engineering Company contracted SGS to carry out the tank inspection in April 2012, in order to determine whether the tanks could successfully and safely be put into operation and to provide a relevant repairing programme. The project was completed in May 2012. Second Harbor Engineering Company is a wholly owned subsidiary of China Communication Construction and is one of two companies in China which are specifically qualified in the construction of roads, bridges and marine facilities.

December 2012 • TANK STORAGE

technical news

Wanner guarantees pump performance

Customers can now test the Hydra Cell P-Series pumps

Wanner International, a manufacturer of seal-less high pressure diaphragm pumps, has invested in a dedicated test facility that enables customers to verify the performance of individual pumps. This optional service works to reassure users of Wanner’s Hydra-Cell P-Series metering pumps that they meet or exceed their performance requirements, as stated in the API 675 specification for controlled volume, positive displacement pumps for use

in service in the petroleum, chemical and gas industries, and being increasingly adopted as the general industry standard for metering and dosing pumps. The heavy duty HydraCell pumps are used for liquid transfer, metering, injection, spraying and dosing of a wide range of liquids including hydrocarbons, chemicals, natural gas liquids and acids. Independent witnessed and non-witnessed testing is available, followed by performance specification.

Samson Controls increases valve versatility

NuStar tells IFC: ‘Nice rack’

Control valve specialist Samson Controls has enhanced a couple of its existing products to provide additional features. The company’s type 3291 valve, suitable for use under severe operating conditions such as in the oil, gas and petrochemical industries, combines the V-port plug and clamped-in seat. The smooth interior surfaces make it hard for deposits to form, minimising the potential for clogged valves. The valve is easy to service as it can be disassembled and assembled using standard tools, while accessories such as flow dividers, perforated plugs, insulating sections, bellows seals, positioners, limit switches and solenoid valves can be easily mounted. Samson Controls’ type 3730-6 positioner with HART communication is an expansion of the Series 3730 positioners. The standard version is supplied with the ExpertPlus valve diagnostics that allow the entire operating cycle of control valves used in throttling or on/off service to be monitored. Another feature is partial stroke testing that provides information on whether shut-off valves function properly on demand and can be started by hand or automatically. Diagnostic data can be read faster thanks to the improved HART communication and emergency shutdown is guaranteed in accordance with IEC 61508 up to SIL 3 which eliminates the need for Samson’s type 3291 valve features a smooth interior to reduce the formation of deposits an additional solenoid valve.

Global terminal operator NuStar Energy is embarking on a loading replacement programme to update its first generation bottom loading arms. NuStar operates 84 storage terminal facilities for the storage and distribution of crude oil, refined products and specialty liquids in the UK, US, Canada, Mexico, the Netherlands and Turkey. At the terminal operator’s Clydebank terminal in Glasgow, Scotland, NuStar has chosen to install loading arms from tank loading equipment manufacturer IFC Inflow, which has supplied NuStar with a rack of loading arms to upgrade the bottom loading gantry facilities. This is the second rack to be installed, following the first installation at Clydebank earlier this year. The IFC BLA445T bottom loading arm is suitable for petroleum bottom loading requirements, such as bottom loading gantries and skids. Built from carbon steel with PTFE steals, the bottom loading arm is compatible with a large number of fuels and liquids. It is a compact, fully adjustable compression spring cylinder to allow easy operation of a fully flooded arm and hose assembly. The 4” nominal bore arm allows flow rates of up to 2,500 litres per minute for fast tanker filling. ‘We have already placed an order with IFC for the next set of arms’, NuStar Clydebank and Grangemouth terminal engineer Neil Woodley reveals.

TANK STORAGE • December 2012

technical news

CST Covers uncovers new dome design CST Covers, a division of CST Industries, has unveiled a flash batten aluminium geodesic dome design. OptiDome includes a double web I-beam for strength and stability, plus optimised patent pending batten seal technology that eliminates environmental exposure and UV degradation. The hub cover

technology eliminates the need for exterior sealant at the nodes. It features an enclosed gasket design that protects from UV and sealant degradation, reduces sealant use and eliminates ponding. The new design is complaint to Euro-Code, Aluminum Association Design Manual 201 and Internaitonal Building Code 2012.

OptiDome boasts a modern appearance

Intertek certified as quality inspection provider Energy company China National Petroleum (CNPC) has certified technical inspection services company Intertek Moody as a quality inspection provider. The certification will enable Intertek Moody to provide a larger range of technical inspection services to CNPC. The certification includes oil and gas storage and pipeline inspections for projects in China and further afield, in addition to inspections of chemical and petrochemical projects and equipment inspections. Intertek is the only foreign-owned company that has been qualified by CNPC for providing inspection services in China. This certification builds on the existing inspection services which Intertek already provides to CNPC, including pipe, equipment and oil country tubular good inspection. Technical inspections are vital to ensure a minimal-risk supply chain. They also help reduce costs, avoid delays and highlights product quality.

The orders are in for PortVision

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PortVision, a provider of business intelligence solutions for the maritime industry, has received new orders from oil companies looking to deploy its platform and dock management system at a total of more than 15 marine terminals. The companyâ&#x20AC;&#x2122;s TerminalSmart platform integrates dock management, scheduling, reporting and analytics with the PortVision Automatic Identification System-based vessel tracking services. PortVision says the technology has been adopted by four new oil companies during the past quarter and it is now being deployed at more than 15 new marine terminal locations across the US in the coming year. The new orders represent more than $2.5 million (â&#x201A;Ź1.95 million) in contract value for the software business. The PortVision AIS-based vessel tracking service is adopted by petrochemical refineries, third-party midstream facilities and other marine terminal organisations as a tool for enhancing visibility and improving business management, analytics, reporting, and operational safety and efficiency. The TerminalSmart platform and dock management system are designed to help marine terminal operators to more effectively meet a broad range of specific challenges including chartering, scheduling, vetting, logistics, loss control and demurrage management, as well as front-line dock operations and overall dock management.

December 2012 â&#x20AC;˘ TANK STORAGE

technical news

Emerson and Vopak sign global framework agreement Emerson Process Management is to provide its automation systems and services to Vopak’s storage and bulk liquid terminal facilities around the world after it was awarded a three-year Global Framework Agreement by the terminal operator. Vopak, the world’s largest independent tank storage provider, says Emerson’s DeltaV digital automation system will help it reduce project lead time, improve strategic planning and project execution, and operate terminals more efficiently. Under the agreement,

Emerson’s Syncade Logistics software has been implemented at Vopak’s fuel distribution terminal at Amsterdam Westpoort in the Netherlands Emerson will design, configure and implement digital automation systems for all new automation projects at Vopak terminals, as well as provide ongoing support

services for new and existing automation systems. Vopak will implement Emerson’s DeltaV system and integrate it with additional terminal logistic and safety

systems to help it optimise operations, reduce field work and time-consuming paperwork and improve both terminal effectiveness and customer satisfaction.



InCon InspectionConsultants

Inspection Consultants (InCon) Ltd offers:

Inspection Consultants (InCon) Ltd is a specialist NDT inspection company providing in service and out of service storage tank inspections in compliance with current codes and standards. To complement our inspection services, InCon is able to offer full engineering assessment of storage tanks to meet the guidelines laid down by EEMUA 159 and API 653 including “fitness for purpose” reports, RBI (Risk based Inspection) assessment and inspection scheduling reports.

To discuss your requirements contact: Steve Delves Tel: +44 (0) 1472 488101 Mob: +44 (0)7725 261 393 Email: stevedelves@incon.co.uk

• Storage Tank Integrity Assessment to EEMUA 159 & API 653 • Storage Tank Floor Inspection using the Floormap VS2i MFL Scanner in both Mapping and Manual mode • Storage tank shell survey using the Scorpion Dry Probe UT Crawler • Stainless Steel and Aluminium storage tank shell survey using a Dry Probe UT Scanner on extendible poles negating the requirement for scaffolding around the tank • Dye Penetrant Inspection (DPI) • Magnetic Particle Inspection (MPI) • Pipeline Integrity Inspection to API 570 • Digital Radiography of pipelines through lagging/insulation • Digital Radiography of PTFE/FRP pipelines • Phased Array Inspection of pipelines, welds, and mapping of corrosion areas • Tubular Inspection using the Olympus MultiScan MS5800 (ECT, IRIS & RFT, NFT, MFL) • Positive Material Identification (PMI) • Remote Video Inspection (RVI) • Bespoke Weld Procedures & Welder Qualifications • Mobile Radiographic Services.

Neil Edge Tel: +44 (0)151 3572212 Mob: +44 (0)7736926750 Email: neil@incon.co.uk

TANK STORAGE • December 2012

technical news

RTS receives NEBOSH accreditation Safety specialist Reynolds Training Services (RTS) is now an accredited provider of the NEBOSH (National Examination Board in Occupational Safety and Health) International Technical Certificate in Oil and Gas Operational Safety. According to RTS director John Reynolds, the qualification imparted manager, supervisors, offshore and inshore workers with specialist skills and knowledge to enhance performance within their roles. He says: ‘The qualification covers a wide breadth of knowledge including hazards inherent in the oil and gas sector, hydrocarbon process safety, fire protection, emergency response, logistics and transport operations.’ Reynolds went on to say that the oil and gas industries were potentially hazardous but that the ITC would play a significant role in maintaining their safety record: ‘Giving the right training to people working in the industry paves the way for safer workplaces, regulatory compliance and assurance that your staff meet national and international standards.’ RTS will be working with UK, Hull-based Humberside Offshore Training Association to develop materials necessary for the course. Those undertaking the qualification can do so onsite at their own premises or at RTS’ training facility at the Centre for the Assessment of Technical Competence in Stallingborough. Candidates are assessed by written examination.

Sure Seal introduces new butterfly valve series Butterfly valves from Sure Seal, a bulk transport valve company and part of OPW Fluid Transfer Group, are now available for use in rugged environmental conditions and with various types of loads. The 345-series Butterfly Valves have been designed to be lightweight but strong. Flow is improved through the use of a thin disc and large valve opening, which also requires low opening and closing force. The valves, all of which are constructed of aluminium, are available in six sizes from 2-6” and contain no hardware on the disc that can come loose and contaminate the product being handled. All sizes use the same handle, which reduces the amount of inventory that is needed.

The valve seats are available in a range of materials, including FDAapproved and chemical-resistant compounds such as Viton, black or white nitrile, EPDM, silicone and EPDMbacked Teflon. This allows the valves to be used with all types of products, from hydrocarbons to oxidising acids (such as nitric and sulphuric), alkalis and organic/ inorganic acids, and at wide temperature ranges from -46°C to 177°C.

Butterfly valves: light but strong

Carl Software Group buys stake in Siveco Group French CMMS and asset management company Carl Software has acquired a 33.34% stake in the Siveco Group, constituting a blocking minority. The two companies have been active in the same market for many years, both with over 25 years’ experience in CMMS, and Carl Software CEO and founder Eric Bonnet said the deal ‘seemed natural’. While Bonnet says nothing will change in the short-term, in the long-term he envisions an ‘alliance highlighting the

respective strengths of each company’. Bonnet continued: ‘This shareholding changes nothing in the total independence of Carl Software. It’s always been of great importance to me not to jeopardise the objectives of the company by giving too much power to financiers interested mostly by quick gains, often against the interests of customers or employees of the company. This is why this operation was financed entirely by our own finds and has no impact on our shareholders.’

Flame detector obtains EN 54-10 certification

General Monitors’ FL400H MSIR flame detector complies with the EN 54-10 standard

A multi-spectrum infrared (MSIR) flame detector from General Monitors has been certified to the EN 54-10 standard, representing the highest quality levels for flame detection devices. The certification of General Monitors’ FL4000H flame detector assures its customers the device has been rigorously tested and has been determined to meet high quality standards. Built on scientific research and recognised by European regulators, insures and major clients, the certification means the FL4000H is eligible for use in countries that conform to European safety standards. Featuring a next generation MSIR sensor that incorporates neural network technology, the FL4000H provides reliable flame monitoring with false alarm immunity, a wide field of view and a long detection range.

December 2012 • TANK STORAGE

technical news

CSG cleans up its act Cleansing Service Group (CSG) is expanding its specialist tank cleaning operation following an increase in demand. As a result the company, headquartered in Fareham, Hampshire in the UK, is investing £40,000 (€50,000) in order to keep pace with new tank maintenance orders and increase its geographical coverage. This will involve the construction of a second depot in Cadishead near Manchester. Its first depot is located in Plymouth. An additional two-man team, backed by investment in specialist jetting equipment, has been recruited and will carry out high pressure tank cleaning, installation and decommissioning services across a wide variety of industrial sectors including the petrochemical industry, airports and food manufacturers. New technology jetting equipment will be deployed for cutting, descaling, coating removal and surface preparation operations in any kind of tank undergoing maintenance. The team has also been equipped and trained for accessing confined spaces such as storage vessels contaminated by hazardous substances, as well as for carrying out more traditional, no-entry cleaning.

Franklin Fueling Systems UPP pipework DIBt approved The UPP Pipework System from Franklin Fueling Systems (FFS), a wholly owned subsidiary of Franklin Electric, has received Germabnt DIBt approval. The DIBt approval includes an A-deviation from the EN 14125 standard, which mandates a more stringent zero permeation requirement in Germany. To meet this requirement, the UPP pipe was FFS’ UPP pipe underwent a SHED test subjected to a Sealed Housing for Evaporative Determination (SHED) test. The SHED of permeation from the pipe. test aims to detect emissions from A large-scale initiative to supply the pipe, which has been pressurised UPP Installer Certification training and filled with aggressive test fuel. throughout Germany is currently This test was conducted using a underway and FFS will provide a flame ionisation detector, capable detailed list of training opportunities of detecting the most minimal traces in the coming weeks.

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incident report n 12/11/12 Wadi Abidah, Yemen n 07/11/12 Tesoro Olympia, Washington, US

An oil pipeline in Yeman has been closed after it sustained significant damage. The 248-mile Maarib pipeline transports an estimated 110,000 barrels a day of light crude to Ras Isa, the country’s main export terminal in the Red Sea. It was damaged in the Wadi Abidah region of western Yemen following a bombing. It is not yet known who is responsible for the attack which caused two explosions.

Heavy fuel oil spilled at Tesoro’s Port Angeles terminal after a fuel barge was overfilled during fuelling operations at the terminal in Port Angeles Harbor. The total volume of spilled fuel is unknown, but an estimated 50-100 gallons of heavy fuel oil flowed into the water before it was captured inside a containment boom. The Washington Department of Ecology and the US Coast Guard oversaw the clean-up operations. By 8 November, clean-up contractors Global Diving and Salvage and Marine Spill Response had cleaned up nearly all of the spilled oil from the water using absorbent materials. The spill is not thought to have caused any problems to wildlife and is under investigation.

n 05/11/12 Ceylon Petroleum Storage Terminals Kolonnawa, Sri Lanka

Crude oil leaked from Ceylon’s pipeline, used to transport product from Colombo Port to the Kolonnawa oil storage terminal, for the second time in a week. Oil pumping was suspended for pipeline repairs.

n 30/10/12 NuStar US

NuStar has reported little damage to a number of its terminals which were closed and secured ahead of Hurricane Sandy. The company’s Paulsboro storage terminal in New Jersey was put back into operation shortly afterwards after ‘damage assessment shows virtually no damage and the terminal has power’. Both Virginia-based terminals – Virginia Beach and Dumfries – suffered no or very little damage. The Virginia Beach facility was back online by the time of the announcement, with the Dumfries storage terminal operational on 1 November. In Maryland, the Piney Point terminal was flooded and tank insulation damaged, while the Andrews AFB facility’s phone system was down. NuStar said it had to pump out standing water around its Baltimore terminal. Its Linden, New Jersey terminal suffered the most damage and an initial damage assessment showed ‘significant high-water damage to the marine and storage terminal’, the website read. ‘Truck rack terminal appears to be undamaged but is without power. Timing for return to operation is pending’.

n 29/10/12 Motiva Enterprises Sewaren, New Jersey, US

An estimated 349,000 gallons of diesel fuel spilled when a tank ruptured at the closed Motiva Enterprises terminal – a joint venture between Shell Oil Co. and Saudi Aramco. Much of the fuel was recovered at the tank’s primary containment area, but around 6,600 barrels spilled into the Woodbridge Creek. The terminal was working with the US Coast Guard, the NJ Environmental Protection Agency and county officials in the clean-up effort. Around 130 crew members responded to the incident and used skimmers and vacuum trucks to transfer oil from the second containment area to storage tanks located at the terminal. Hurricane Sandy caused damage to another storage tank at Motiva’s Sewaren terminal, but no spilled fuel was reported. The joint venture’s New York facility also suffered flooding and a loss of power due to Hurricane Sandy. Motiva’s Sewaren terminal has a storage capacity of more than 5 million barrels of refined products.

n 29/10/12 Ceylon Petroleum Storage Terminals Kolonnawa, Sri Lanka

A pipeline transporting crude oil from Colombo Port to the Kolonnawa oil storage terminal burst, resulting in an oil leak. Ceylong Petroleum Storage Terminals denied allegations that there was a ‘huge’ loss from the leakage.

n 23/10/12 Los Angeles, California, US

Oil spilled from a tank farm at Signal Hill following a pumping fault. The oil entered a public neighbourhood and was seen flowing down streets, resulting in a shutdown of roads and a major intersection. According to Los Angeles County fire inspector Quvondo Johnson, some oil did flow into the storm drain system, although the exact volume is not yet known. The storm drain empties into local waterways and authorities from the California Department of Fish and Game and the US Coast Guard responded to the leak for fear of contamination. Los Angeles County Health and Hazmat crews were also called the incident which was reported just before 8am. The spill was caused when a high pressure line pumping crude oil into a tank backed up and overflowed. It is up to state authorities to determine whether the tank farm should be fined.

n 23/10/12 Mobil St Kilda, Port of Melbourne, Australia

Oil company Mobil has been fined $150,000 (€117,500) for an oil spill back in 2009. On 21 August 2009 oil spilled at Mobil Refining Australia’s Gellibrand Terminal at the Port of Melbourne when high winds fractured a loading arm during fuel transferral. About 180kg of liquid crude oil was recovered from the water around the pier during the clean-up process, and more than 3,000kg of oil-contaminated soil was recovered from St Kilda beach. The money must be paid to Port Phillip EcoCentre. The court ordered Mobil must also pay EPA court costs of $135,000.

December 2012 • TANK STORAGE

terminal news

TANK STORAGE â&#x20AC;˘ December 2012

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December 2012 • TANK STORAGE

regulations

Euro corn fuel slashed, phone debate engaged It is good to talk According to a report from the International Liquid Terminal Association (ILTA), use of mobile phones around or within petroleum facilities has been subject to a new study by the Institute of Electrical and Electronics Engineers (IEEE). Current industry standards have restricted the use of mobile and cellular phones in potentially hazardous areas, with only those devices deemed ‘incapable of causing an ignition under normal conditions’ allowed to be used. Under those guidelines mobile phones had to be certified in accordance with International Society of Automation’s Recommended Practice for Portable Electronic Products (PEP) in Hazardous Locations. Not many models meet

those PEP standards but the IEEE study suggests that, although most available phones are not ‘inherently safe’, the associated risk of using them is low. The IEEE evaluated the risks associated with phone use at Class One, Zone Two or Class One, Division Two hazardous areas within the petroleum refining and chemical manufacturing industries. Testing was spread across eight different cell phone models and followed PEP requirements. It was concluded that the odds of a mobile phone causing a fire or explosion in such a hazardous area were one in a million. Subsequent IEEE testing of the high risk components in the devices also indicated a very

low probably of ignition, even under exceptionally hazardous conditions. The actual use of mobile phones within the petrochemical industry was included in the IEEE study, which found that there were used on occasion by personnel. The reliable radio is still the primary way to communicate, particularly in hazardous areas, and those using mobile phones had to have them listed and approved by a third party authority. A conference call between members of the ILTA’s health and safety subcommittee will be discussing this subject, as certain so-called ‘safe’ phone models on the 2G network will no longer be supported by existing communication providers, before the start of December.

Reduced level of food-based transport fuel for Europe The European Commission has formally altered the European 2020 target of crop-based biofuels and bioliquids supplying a minimum 10% mix within renewable energy in transportation. This main proposal will limit the contribution first generation biofuels derived from food crops can make towards national renewable energy targets to 5% in a move to relieve pressure on the food industry. In addition all subsidies for crop-based biofuels will be stopped after the year 2020, the very year every member state was supposed to be using a minimum of 10% blended fuel via the commission’s original intentions. ‘This proposal contrasts with the US which continues adherence to its renewable fuels policy, despite rising food prices and a new focus on lifecycle greenhouse house gas emissions,’ says the International Liquid Terminals Association (ITLA) in a statement. The European president of Denmark-based second generation biofuels developer Novozymes, Lars Hansen, has been quoted as saying he’d like to see ‘clear deliverables set for biofuels like in the US’ despite his business maybe benefiting from the new proposal. ‘Companies like us would like to continue investing in Europe but, based on this announcement, I would be surprised if anybody would do so,’ he adds. However the US Environmental Protection Agency (EPA) is set to consider its stance on corn-based biofuels after receiving some discontented feedback recently. ‘Since 2011, a prolonged drought has diminished corn supplies in the US and rekindled the debate over how much corn should be used for fuel. The Environmental Protection Agency (EPA), under the existing Renewable Fuel Standard, requires that a minimum of 13.2 billion gallons of ethanol be used in transportation fuel for 2012,’ continues the ILTA. ‘Consequently, domestic ethanol production will consume about 40% of the annual corn harvest this year. The EPA has received two separate petitions requesting a waiver of the ethanol mandate but it is refusing to respond until the end of the year.’

TANK STORAGE • December 2012

Leaking money: that little problem could soon become a big drain

Gas Works hit with penalty fine US-based natural gas facility Philadelphia Gas Works (PGW) has agreed to pay a penalty to settle alleged violations of underground storage tank (USTs) regulations at its facility. The fine, imposed by the US Environmental Protection Agency, totals $8,090 (€6,355) and was given as PGW had not complied with safeguards designed to prevent, detect and control leaks of petroleum and other hazardous substances from USTs. The alleged violations involved a 10,000 gallon capacity UST

used to store diesel fuel. The EPA said the company failed to comply with release detection requirements for almost a year and failed to promptly investigate a suspected leak from the tank. It must be understood that the settlement does not reflect a determination by the EPA that there was an actual leak from that particular UST. The settlement penalty reflected PGW’s cooperation with the EPA in correcting the alleged non-compliance and resolving of the concern.

page header

December 2012 â&#x20AC;˘ TANK STORAGE

regulations

Marine terminals: the next step in standards & safety Assessment Questionnaire’, which OCIMF had launched in 2004. The ongoing MTIS project is aimed at ensuring all marine terminals worldwide reach common high standards of

TANK STORAGE • December 2012

safety and environmental protection. It is a consolidated safety system embracing the physical properties of the terminals, management systems and operator training. Questions from the

survey ranged from the hardware available, to berth measurements and transfer rates. Examples include: • State maximum tidal range in berth approaches • Is laden transit to and/or © copyright: OCIMF

In October the Oil Companies International Marine Forum (OCIMF) published the second phase Marine Terminal Management and SelfAssessment (MTMSA) of its Marine Terminal Information Systems (MTIS) package. Marine Terminal Management and Self Assessment (MTMSA) is a standardised tool for global application to assist terminal operators in the assessment of the effectiveness of their management systems for berth operations and the management of the ship/shore interface. The guide can be used by terminal operators to demonstrate potential risks and show how they can be analysed and reduced. This supersedes the publication‘Marine Terminal Baseline Criteria and

regulations © copyright: OCIMF

from the berth conducted using the tide? • State details of any specific berthing and/or unberthing restrictions. By using the information generated, vessel programmers, schedulers and ship masters will be better

able to assess the compatibility of ships and terminals and ensure safe operation and environmental protection. Some situations where the lack of up-to-date or easy to find standard formats can lead to injuries or fatalities, not to mention loss

of cargo and environment damage, which included: • Hull damage sustained in tankers from seabed debris due to erroneous depth data for the berth • Hulls sinking in silt such as estuaries, where the water depth may be measured regularly but not with the correct tools • Smaller tankers directed to berths suitable only for larger tankers • Discovering too late that moorings are too short or that the berth is unexpectedly modified • Tankers arriving with a loading berth in excess of the berths requirements. Although compliance is not obligatory, OCIMF has 226 marine tanker terminals on its database. Terminals that are benefitting from usage of MTIS include Shell Terminal in Singapore, Exxon Terminal

in Fawley (UK) and Primorsk Terminal in Russia. The third and fourth phases of the project will be completed and released next year. The third phase, The Marine Terminal Operator Competency Training System, aims to identify key competences and knowledge requirements, together with appropriate verification processes, to help members develop or commission their own terminal operator training programmes to ensure that personnel working on the ship/shore interface have the required skills and competence. The fourth phase, the Marine Terminal Assessor Programme, is aimed at developing supporting guidance to assist terminals to implement the second MTMSA process in a structured and uniform manner.

December 2012 • TANK STORAGE

regulations

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regulations To compound matters, a wave of similar legislation has been introduced in other parts of the world, increasing pressure to ensure compliance across the supply chain and adding further complexity into the mix. Under REACH, companies in the chemical bulk storage and shipping sectors will – like the manufacturers and their customers – need to demonstrate that all their operations are covered by the required paperwork. This means ensuring that their employees and customers have access to relevant, upto-date material safety data sheets MSDSs and exposure scenarios and that they are using the most up-to-date versions of the documents across the business.

Tighter controls on chemicals increases compliance challenges The next landmark for the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) compliance is 31 May 2013. The legislation will bring tighter European controls on the manufacture, movement and use of dangerous or hazardous chemical products. The transport sector for hazardous chemicals and

materials relies heavily on Classification, Packaging and Labelling (CLP) regulations for information on shipments. But whereas CLP provides information through labels, REACH legislation now states that more detailed information must be provided through the use of safety data sheets (SDSs) and that the information provided must be readily

TANK STORAGE • December 2012

available to the relevant members of the workforce throughout the supply chain. This stage of REACH is expected to have a significant impact on both larger companies and SMEs in the cargo handling sector who, like all other sectors of the industry, will find the process of compliance complex, time consuming and challenging.

Since the EU introduced REACH in 2007, there have been reports of significant increases in administration as a result of companies having to ensure their customers are supplied with safety data sheets, exposure scenarios and other critical safety information. Under REACH it is not sufficient to have sent the latest documents to customers; the onus is on suppliers to ensure they have been received by their customers and that any subsequent updates have also been received. At the same time, companies are required to ensure that all internal personnel who may come into contact with hazardous materials are also provided with current MSDSs and other documents – which makes record-keeping even more time-consuming. Looking beyond REACH legislation, we have recently seen a wave of REACH-like health and safety regulations being established outside the EU in places such as China, Korea, Turkey and Switzerland. There has also been updated domestic health and safety legislation in the US, for example, with changes to

regulations OSHA, Hazcom and EPCRA. The common factor in all these regulations is their emphasis on manufacturers and distributors providing more information about the chemicals and their properties in MSDSs and ensuring these documents and other critical information are delivered directly to customers. It is no longer good enough to send information by post or e-mail, as this merely assumes they have reached the customer. Compliance requires implementing the resources, systems and processes in order to validate the delivery of the documents. As indicated above, a related common element of the international regulations is the need to ensure that employees using, handling or transporting hazardous materials are fully aware of current safety requirements so that actions are consistent and safe. Compliance, therefore, means that manufacturers, chemical companies and downstream users or handlers must consider how they maintain compliance and also how they can prove compliance in the event of an incident or even legal action. To ensure compliance, they will need easily retrievable records – and preferably audit trails – of the MSDSs and exposure scenarios that have been sent and received by customers and are being used by their employees. They will also need to demonstrate that new or updated documents have replaced previous versions. It also requires maintaining copies of past versions and, in many cases, records that demonstrate compliance going back 30 years. The additional administrative workload is quite significant and needs to be anticipated – or transferred to automated systems as soon as possible. To add further complexity to the situation, there is a

great deal of legislative overlap, mainly because the new international legislation has to co-exist with domestic health and safety directives. The requirement to register hazardous materials is clear in its own right, but other elements have parallels in existing regulations. The supply and delivery of MSDSs, for example, is often addressed in more than one relevant legal requirement. In the UK, Control of Substances Hazardous to Health (COSHH) sits alongside REACH with both calling for risk assessments and utilising the information in MSDSs. In the US, the Emergency Planning and Community Right-to-Know Act (EPCRA) Section 313: Hazardous Chemical Storage Reporting Requirements, requires chemicals suppliers to notify customers of any EPCRA Section 313 chemicals present in mixtures or other trade name products that are distributed to facilities. The notice must be provided to the receiving facility and may be attached or incorporated into that product’s MSDS. If MSDSs are not required, the notification must be in a letter that contains specific information and accompanies or precedes the first shipment of the product to a facility. Also in the US, MSDSs are covered by the Occupational Safety and Health Administration (OSHA). These regulations are aimed at making sure that the hazards of all chemicals imported into, produced or used in workplaces are evaluated and that employees are given information about these hazards. OSHA requires all hazardous chemicals manufacturers, importers, and distributors to provide the appropriate labels and MSDSs to the employers (companies) to which they ship the chemicals. Every container of hazardous chemicals sent must be labelled, tagged,

or marked with the required information, accompanied by an MSDS at the time of the first shipment of the chemical. Any updates must also be sent to the customer. MSDSs must be readily accessible to employees when they are in their work areas during their work shifts. Workplace Hazardous Materials Information System (WHMIS) is Canada’s national hazard communication standard. This communication standard addresses workers’ ‘right to know’, insisting that the MSDSs are readily available to workers that may be exposed to a controlled product. In Japan, the CSCL, PDSCL and PRTR legislation outlines specific requirements for information delivery throughout the supply chain. In Korea, the standard for classification and labelling of Chemical Substances and MSDSs requires that not only should the MSDS be provided by the supplier to the customer, but that the recipient has an obligation to provide the sender with confirmation of receipt. Similarly, the China GHS requires that MSDSs are communicated to downstream users and that updates are provided as new information on hazards arise. Australia’s Model Work, Health and Safety (WHS) sets out the obligation to prepare and maintain up to date information on an SDS and to provide it to all customers or any person that is likely to be affected by a chemical. It is clear the issue of how MSDSs should be supplied and delivered to customers and employees is being addressed in many pieces of legislation. The requirements can vary widely but, as expected, the global trend is towards more stringent rules. It is clear, however, that global legislative requirements are moving in the same direction as REACH, with the onus firmly on suppliers to ensure that safety information

is passed down the supply chain. The need for systems to aid and automate this process is also very clear. One such system is the new REACH Delivery 2013 Edition, which is designed to enable companies to comply with all relevant international and domestic legislation easily and cost effectively. It supports the sending, receiving, internal distribution and automated updating of MSDSs and associated documents for large and small companies alike. It meets the various legislative requirements by guaranteeing delivery and monitoring and auditing actual receipt by customers and staff, as well as ensuring that the latest version of the document is always available and has replaced previous out of date versions. The service is available to all companies worldwide. It is low cost and easy to use and customers can try it out free of charge. Companies worldwide use REACH Delivery to automate the sending and updating of their documents. Their customers can receive them by email – or use REACH Delivery to receive (and send) their documents. Either way companies have found they are able to monitor, track and report on the process, while retaining a delivery status on all documents sent to and received by their customers and staff. The saving, in time and cost of administering data sheets and other important documents, is considerable. Complying with REACH 2013 and other health and safety legislation is a challenge for many organisations – but with the right system in place, companies can have peace of mind they are compliant in terms of the delivery of critical safety information to their customers and employees. For more information:

This article was written by Malcolm Carroll, director of REACH Delivery International www.reachdelivery.com

December 2012 • TANK STORAGE

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acquisition

Oiltanking keeps on

growing

‘Opportunities in the oil storage market don’t come up every day, so when they do, we grab them with both hands,’ as both Oiltanking Asia Pacific’s president and VP for business development explain Germany-based storage service provider Oiltanking surprised the market in October by announcing it was to acquire 100% of Singapore-based Helios Terminal and its holding company Chemoil Storage. The 503,000m3 capacity terminal storage facility allegedly cost Oiltanking $285 million (€223 million). The company is now in the completion phase of the process. ‘We are awaiting final Chemoil shareholder approval and stock market clearance, which should all be completed by the end of the year,’ says Koen Verniers, president of Oiltanking Asia Pacific. In announcing the sale Chemoil stated: ‘The company believes that structural changes that have occurred in the marine fuels market will, in the future, favour an asset-light business model that is able to respond quickly to volatility in volumes and margins. The proposed disposal is therefore being carried out to make more efficient use of the company’s resources by re-allocating funds currently tied up in storage assets.’ Oiltanking, on the other hand, views this transaction as an opportunity to buy into a stable and profitable business. ‘We have a desire to grow our footprint across Asia Pacific,’ Jack van Lint, VP of business development for

Oiltanking Asia Pacific, says. ‘Opportunities like this don’t come along every day, so when they do, we have to make the most of them. ‘We are very fortunate that Helios is a relatively new terminal and is very well-maintained,’ Verniers explains. ‘This means we will be able to focus on business as usual when we take over.’ The facility has a finger jetty and six berths and can handle up to two Suezmax vessels at the same time. This latest acquisition will increase Oiltanking’s capacity in Singapore to nearly 2.2 million m3. Oiltanking already has storage facilities near the entrance of Jurong Island, but was keen to expand its footprint on a different part of the island. ‘The east of the island is pretty much full, but the west presents opportunities for future expansions,’ Verniers explains. The rock caverns project, for example, is located there. Southeast Asia’s first underground storage facility is due to be completed between 2013 and 2014, although has been plagued with delays. The operatorship contract is yet to be decided, and would run for a period of 15 years. ‘We have the capability to operate this project and will express an interest if and when this opportunity becomes

available,’ Verniers adds. Across Singapore Oiltanking says its current occupancy rate is around 100% for petroleum products and between 80-90% for chemicals. Oiltanking underwent a major expansion only a few years ago. ‘We did this speculatively without secured contracts in place,’ Verniers explains. ‘Although market conditions are more difficult now, this hasn’t particularly affected us and we are still doing relatively well. Economic challenges do have a more

direct and immediate impact on the chemical sector, though, than on petroleum.’ The slowdown in China’s economy is also having an impact, with the government reporting just a 7.4% expansion in Q3 2012. But an upcoming leadership change may well turn things around. For the first time in a decade – and only the second time in history – the men at the top of the Chinese Communist Party will step down, voluntarily, and hand over power to a new generation. The composition

December 2012 • TANK STORAGE

acquisition

of the new Politburo could have profound implications for China’s economic priorities. Elsewhere in Asia This unexpected opportunity may well also have implications for Oiltanking’s plans elsewhere in Asia. ‘We won’t be making any other major expansions immediately,’ Verniers says, ‘but we are looking seriously at some other similar sized projects. We want to grow, but it won’t be done haphazardously. ‘In Malaysia, for example,

we’re in contact with the major players.’ Unlike some, Oiltanking does not view Malaysia as a threat to Singapore regarding its position as a growing storage hub. ‘We are investigating how growth in the region will have an impact. We take a positive view in that all the realistic projects in Malaysia are necessary and the market will be able to absorb the capacity locally. We presume many of the new builds have already secured three to five year contracts so the interesting

TANK STORAGE • December 2012

question will be what happens once these contracts come up for renewal,’ Van Lint says. Oiltanking had been considering building southeast Asia’s largest oil storage facility in Indonesia with Sinopec, but the partnership fell through and Sinopec is now continuing with the $850 million project alone. Oiltanking is considering building a storage facility elsewhere in Indonesia in Karimun instead. ‘No decision has been made so far,’ Verniers explains. ‘We pursue our chances vigorously

but you can’t win them all.’ Regarding other opportunities, Oiltanking says it has the experience to work with older storage terminals, and even refineries that require conversion. ‘Much of the refining capacity in Singapore is modern so these opportunities don’t arise very often, but in Australia and Japan it is a different story. We have turned around a contaminated facility in the past. Oiltanking does not yet hold any storage for strategic assets – another area which it may explore further in the future.

tank terminal update

Storage – we have it covered At the end of this year Tank Storage magazine will be the ONLY industry audited publication – giving you hard data about who, and how many, potential customers are seeing your adverts.

Make the right choice

David Kelly, Advertising Sales Manager t: +44 (0)20 8687 4139 e: david@tankstoragemag.com www.tankstoragemag.com 58

December 2012 • TANK STORAGE

tank terminal update

Tank terminal update – Asia Vopak Location Yangpu, Hainan Province, China Products Crude oil Capacity 1.35 million m3 Construction / expansion / Construction acquisition Completion date End of 2013 Comment The site has the potential to extend storage capacity to 5.2 million m3

Vopak and SIDC Location Yangpu, Hainan province, China Products Crude oil Capacity 5.2 million m3 Construction / expansion / Construction acquisition Project start date November 2011 Completion date 2015 Investment CNY7 billion (€820 million) investment Comment SIDC is the terminal’s majority stakeholder with 51%, while Vopak holds a 49% stake

Merletti Partners Location Products

Tianjin, Hebei province, China Fuel oil, marine oil, petrol, diesel and benzene Capacity 800,000m3 Construction / expansion / Construction acquisition Designer / builder Rose Rock Infrastructure Project start date April 2011 (alliance formed) Completion date 2013 Investment $256 million (€200.5 million)

TANK STORAGE • December 2012

Shell Oil Group Location Tianjin, Hebei province, China Products Oil Capacity 200,000m3 Construction / expansion / Construction acquisition Project start date June 2012 (announced) Completion date 2015 Investment RMB550 million (€69 million) Comment The terminal will be built in two phases, the first of which will be 55,000m3 capacity installed and operational in 2013. Shell Oil Group will break ground on the second phase in 2014

Sinopec Luoyang Location Henan province, China Products Crude oil Capacity 4.5 million tonnes Construction / expansion / Construction acquisition Project start date March 2012 (announced)

Sinopec Group Location Jianyang, Sichuan Province, China Capacity 200,000m3 Construction / expansion / Construction acquisition Project start date January 2011 Completion date End of 2012 Investment RMB300 million (€38 million)

tank terminal update Ningbo Shihua Crude Oil Terminal Company Location

Daxie, Ningbo, Zhejiang province, China Products Crude oil Capacity 450,000 tonnes Construction / expansion / Construction acquisition Completion date May 2012 Comment The facility is Asia’s largest crude oil storage terminal

Guangsha Group Location Huangshan, Zhoushan Islands, China Products Crude oil and petroleum products Capacity Crude oil: 1 million m3 Petroleum products: 510,000m3 Construction / expansion / Construction acquisition Project start date December 2011 (broke ground) Investment RMB12 billion (€1.5 billion)

VTTI Location Products

Vassiliko, Cyprus Petrol, diesel, jet fuel, gasoil and MTBE Capacity 643,000m3 Construction / expansion / Construction acquisition Designer / builder J&P Group Project start date Early 2011 Completion date End of 2014 Investment €300 million

Ministry of Petroleum and Natural Gas Location Products Capacity

Mangalore, India Crude oil An oil storage cavern featuring two 900m-long caverns with a total storage capacity of 1.5 million tonnes of crude oil Construction / expansion / Construction acquisition Designer / builder Punj Lloyd. The contract includes engineering, procurement, construction and commissioning of infrastructure related to receipt and delivery of crude oil, metering, heating, wastewater treatment and flaring, among other things Completion date 2015 Investment Rs330 crore (€47 million)

Nagarjuna Oil Location Products Capacity

Cuddalore, Tamil Nadu, India Crude oil The refinery will have a yearly capacity of 6 million tonnes Construction / expansion / Construction acquisition Project start date 2012 Completion date Beginning of 2013 Investment Trafigura has invested $130 million (€102 million) into the refinery and will invest another $120 million into building petrochemical storage facilities

Hindustan Petroleum Location Products

Ennore, Chennai, India Motor spirit, high speed diesel, superior kerosene oil and aviation turbine fuel Capacity Twenty aboveground storage tanks with a total storage capacity of 140,000KL Construction / expansion / Construction acquisition Completion date October 2012 Investment Rs330 crore (€47 million) Comment This new storage terminal replaces HPCL’s existing 15-acre terminal in Tondiarpet, which had a storage capacity of just 50,000KL

Essar Ports Location Capacity

Vadinar terminal, India An increase to 58 million tonnes before the addition of a further 20 million tonnes in Phase II Construction / expansion / Expansion acquisition Project start date July 2011 (announced) Completion date Phase II of the development is scheduled for completion by the end of this year Investment Rs1,000 crore (€158 million) Comment The expansion will feature a jetty and petroleum product handling services, as well as storage tanks and a road gantry

December 2012 • TANK STORAGE

tank terminal update

Sinopec Location Batam Free Trade Zone, Indonesia Products Crude oil and refined fuels Capacity 16 million barrels Construction / expansion / Construction acquisition Project start date October 2012 Completion date End of 2014 Investment $850 million (€665.6 million) Comment The storage terminal will become the largest in Southeast Asia. A refinery and petrochemical facility could be built in a second phase

PT Pertamina Location Products Capacity

Lawe-Lawe, Kalimantan, Indonesia Crude oil 25 storage tanks with a total storage capacity of 25 million barrels of oil Construction / expansion / Construction acquisition Project start date January 2012 (announced) Completion date 2014 Investment $450 million (€352.4 million) Comment In addition to storage tanks, the terminal will also feature a crude blending facility

PT Pertamina Location Riau province, Sumatra, Indonesia Products Fuel oil and petrol Capacity 300,000kl Construction / expansion / Construction acquisition Project start date December 2011 (announced) Completion date 2013 Investment $50 million (€39 million) Comment Pertamina is also building infrastructure related to the oil products storage on Sambu island, including three jetties that can accommodate 100,000 dwt ships

Tethys Petroleum Location Kazakhstan Products Oil Construction / expansion / Construction acquisition Completion date The Aral Oil Terminal opened in January 2012 but could be expanded by a further 12,000bpd shortly Comment The new terminal comprises oil storage tanks and a rail loading facility, which transports oil shipments from Tethys Petroleum’s Doris oilfield into the Kazakh rail system

TANK STORAGE • December 2012

Korea National Oil Location Products Capacity

Ulsan, South Korea Crude oil and petroleum products The new storage and trading hub will consist of two terminals with a total storage capacity of 28.4 million barrels, including a 9.9 million-barrel terminal for petroleum products and an 18.5 million-barrel terminal for crude oil Construction / expansion / Construction acquisition Project start date 2013 Completion date 2016+ Investment Several companies have expressed an interest in investing in the project

Oil Hub Korea Yeosu Location Yeosu, South Korea Products Crude oil Capacity 8.18 million barrels Construction / expansion / Construction acquisition Project start date February 2011 Completion date End of 2012

Vopak and Dialog Group Berhad Location Products Capacity

Pengerang, Johor, Malaysia Oil products It will have an initial storage capacity of 1.3 million m3. An additional 1 million m3 of storage can be added to the terminal at a later date Construction / expansion / Construction acquisition Project start date 2011 (formed JV) Completion date 2014 Comment The new terminal will also feature blending distribution facilities for crude oil and clean oil products

Armada Sdn Bhd Location Malaysia Products Crude oil Construction / expansion / Construction acquisition Project start date Beginning of 2013 (scheduled to break ground) Completion date 2017-2018 Investment RM8.5 billion (€2.2 billion), Comment The terminal will be established in two phases. The first phase will see an investment of RM4.7 billion for the construction of 1.5 million m3 of crude oil storage. Phase II covers the building of the refinery for an additional RM3.8 billion

tank terminal update Lanka IOC

VTTI Location Malaysia Products Oil Capacity 841,000m³ comprising more than 40 tanks Construction / expansion / Construction acquisition Completion date Mid-2012 Comment The ATT Tanjung Bin terminal could add a second development phase which will see a further 820,000m³ of storage capacity added to the development. The land has been cleared to make way for it

Location Products Capacity

Trincomalee port, Sri Lanka Crude oil and jet fuel Ninety-nine storage tanks, each with a capacity of 12,000KL Construction / expansion / Expansion and upgrade acquisition Investment $35 million (€27.4 million) Comment The renovations will involve improving the fuel handling and operation facilities, building some new tanks and making the jetty at the site stronger

CPC Taiwan and others Pilipinas Shell Petroleum Location The Philippines Products Oil Construction / expansion / Construction acquisition Project start date June 2012 (announced) Comment It would be strategically positioned for shipment of products such as those coming from Singapore. The facility may help stabilise prices in the targeted areas because it could pare logistics costs in the transport of products. Shell has been investing heavily in the Philippines recently

Oiltanking Location Jurong Island, Singapore Products Crude oil Capacity 503,000m3 Construction / expansion / Acquisition of Helios Terminal and its acquisition holding company Chemoil Storage Project start date October 2012 (announced)

Location Kaohsiung Harbour, Taiwan Products Petrochemicals Construction / expansion / Expansion acquisition Project start date Phase II of the project was approved in February 2011 Completion date 2019 Investment NT$90.6 billion (€2.4 billion)

One Anametrics Location Thailand Products Diesel, benzene, fuel oil Capacity The refinery will refine 12,500 barrels a day and feature six storage tanks with a total capacity of 30,000m3. Three other tanks will be built to store refined oil over the next five years Construction / expansion / Construction acquisition Project start date 2012 (announced) Completion date 2017. The refinery will be completed next year Investment Bt12 billion (€300 million)

Singapore LNG Location Jurong Island, Singapore Products LNG Capacity 9 million tonnes a year Construction / expansion / Construction acquisition Project start date October 2012 (announced) Completion date 2017 Investment $500 million (€391 million) Comment Phase 1 of the Jurong Island terminal will come online next year when the construction of two LNG storage tanks with a total capacity of 3.5 million tonnes is complete. A third LNG storage tank is expected to come online later in 2013 and will boost capacity to 6 million tonnes per year. The terminal, designed to feature a maximum of six storage tanks, will enable Singapore to import LNG from around the world. Singapore LNG says a fifth tank could be developed in the future, or even a second terminal

Vietnam National Petroleum Location Van Phong, Vietnam Products 230,000m3 of gasoil, 125,000m3 of petrol and 150,000m3 of fuel oil Capacity 505,000m3 Construction / expansion / Construction acquisition Project start date 2012 Comment The facility will also feature four jetties capable of docking 150,000-tonne vessels

This list is based on information made available to Tank Storage magazine at the time of printing. If you would like to update the list with any additional terminal information for future issues, please email keeley@horseshoemedia.com

December 2012 • TANK STORAGE

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December 2012 • TANK STORAGE

storage in China

China on the rise by Lynda Davies China’s bulk liquid storage sector has seen a big growth in capacity over the past decade amid surging oil imports to meet burgeoning local demand and rising volumes of chemical product imports. The state-backed oil majors are building new storage terminals and embarking on further expansions of their existing facilities in response to an expanding local customer base. China’s government is also encouraging domestic producers to increase their commercial oil reserves. International independent terminal operators also continue to expand their

mainland presence, encouraged by the longterm favourable outlook for chemical products demand in the country and to keep pace with global chemical company client requirements for high quality storage facilities. Local players serving mainly local customers are also entering the chemicals storage sector, further keening up competition. Petroleum storage expansion According to China International Capital (CICC), estimates quoted by the agency in the China section of its 2012 Oil & Gas Security

TANK STORAGE • December 2012

Emergency Response of IEA countries report published in July 2012, China’s crude oil commercial storage capacity stood at around 310 million barrels (approximately 49.3 million m3) in 2010 and planned projects suggested it could increase by a further 150 million barrels by the end of 2012. CICC estimated the country’s refined product storage capacity at around 400 million barrels in 2010, which is seen rising to almost 500 million barrels by 2015. However, the IEA pointed out that figures from official sources in China are ‘considerably more conservative’, also noting

the great deal of ambiguity surrounding the country’s Strategic Petroleum Reserve (SPR) plans and commercial storage expansions. The agency quoted China’s National Energy Administration figures of 26.5 million m3 in 2010. According to China National Petroleum (CNPC), the country’s total commercial storage capacity reached 34.95 million m3 by the end of 2011. China’s oil market is dominated by the four state-owned oil majors (CNPC, Sinopec, CNOOC, and Sinochem) who have their own terminals. Crude oil terminals are strategically

storage in China planned and controlled by the government. Consequently, potential investors face limited availability of terminal sites and high initial capital expenditure requirements. While this is starting to change, international terminal operators’ presence in China historically has largely been in the chemicals storage sector and is mainly in the country’s coastal provinces. Sinochem Nantong and Tianjin expansion focus China National Chemicals Import and Export (Sinochem) owned a total of approximately 25 million

near the Jiangsu Harbour area, and construction of a third expansion is underway. Sinochem owns an 82% stake in the terminal with the balance of shares belonging to Nantong Investment. The facility handles mainly petrochemical products. An additional 214,600m3 of storage capacity was added to the existing 238,000m3, comprising 58 tanks under the second expansion. The phase three of development will add a further 800,000m3 of storage and a second jetty capable of handling up to 50,000 dwt ships. The terminal is reported to have vessel loading capability

Sinochem Sinopec Shanghai Orient Petrochemical Terminal located in the Shanghai Pudong New Area m3 of oil and oil products

of up to 4,000m3 an hour.

storage capacity in China at the end of 2011 in locations covering the Yangtze River Delta, Pearl River Delta and the Bohai Bay area, as well as at other coastal and riverside regions in the country. The group, which reported a total throughput of 35 million tonnes in 2011, considers itself to be the top player in China among the third party petrochemical storage and logistics operations in terms of operation scale and service capacity. The group completed a second development phase in December 2011 at Sinochem Nantong Terminal (SNTCO), located on the Yangtze River

According to Sinochem, the completion of this third expansion at the Nantong terminal will make SNTCO the largest petrochemical storage service provider on the Yangtze River. At the northern Tianjin port, the group in 2011 put into operation the first phase of the Sinochem Tianjin Port Petrochemical Terminal Co., after trial operations began in late December 2010. The second phase of development was completed in December 2011 and trial operations began in January 2012. Sinochem is partnered in the terminal by Tianjin Port (Group) and Hong Kong

Zhaotian Investment. The terminal currently has 960,300m3 of storage and can accommodate vessels up to 50,000 dwt at its jetty. Two pipelines connecting to Tianjin Port’s 300,000 and 150,000 dwt jetties were also constructed as part of the second phase of the terminal’s development. Sinochem Tianjin Port Petrochemical Terminal. secured a crude oil storage licence in late October 2012 from China’s Ministry of Commerce (MOFCOM). The licence is required for facilities which have over 500,000m3 of crude oil storage capacity. Under the licencing rules the facilities should also be equipped with crude pipelines or exclusive railways for crude transportation or no less than 50,000 dwt jetties for crude. To date some 15 Chinese companies are reported to have been granted crude storage licences by MOFCOM. Sinochem said it has strategically pinpointed Nantong and Tianjin for the expansion and development of its storage business in China to cope with anticipated growth in demand for storage of petroleum and petroleum products. The group is also progressing a fourth expansion project at the Sinochem Sinopec Shanghai Orient Petrochemical Terminal located in the Shanghai Pudong New Area. The terminal handles both oil products and chemicals. Sinochem is the main shareholder, with interests also held by Sinopec and Shanghai Gangcheng Collective Assets Investment. The terminal has storage capacity totalling 223,500m3. The capacity comprises 18 tanks with total capacity for 175,000m3 for oil products and a further 40 tanks with a total of 48,500m3 storage for chemicals. The terminal can handle vessels of up to 50,000 dwt. Sinochem is also working

on a third expansion at the Sinochem Zhuhai terminal. A second phase of development at the facility was completed in February 2011. The terminal has storage capacity totalling 670,000m3. Among other of the group’s projects is a joint venture tank farm and terminal under development in the Qitai area of Lianyungang Port. Under the deal reached in September 2011, Sinochem and the port plan to build three chemical jetties and tank storage capacity of 640,000m³. The three jetties will be spread out over 1,000m of shoreline and will be able to handle ships of between 50-100,000 dwt. Earlier this year the group signed a tentative deal with the local government in Fujian province to build a $94.8 million (€74.3 million) oil terminal and storage facility with capacity for 3.8 million m3. The storage will include tanks for oil products and chemicals but most of the capacity would be devoted to crude oil, according to a Sinochem official. It is not currently clear if the project has secured central government clearance to proceed. Sinopec Kantons JV acquisitions Hong Kong-listed Sinopec Kantons Holdings (a wholly owned subsidiary of China International United Petroleum & Chemical, itself a full subsidiary of China Petroleum and Chemical Corporation [Sinopec]), believes it has strengthened its competitive advantages and positioned itself to become the largest independent crude oil terminal business player in China and, in turn, one of the largest in Asia following its acquisition of parent company Sinopec’s equity interest in five joint venture terminal companies on the mainland. Sinopec Kantons paid a total of RMB1,809,807,300

December 2012 • TANK STORAGE

storage in China (€218 million) to acquire Sinopec’s 50% equity interests in Ningbo Shihua, Qingdao Shihua, Tianjin Port Shihua, and Rizhao Shihua, and a 90% interest in Tangshan Caofeidian Shihua. The acquisition deal, made through wholly owned subsidiary Sinomart KTS Development, was reached in December 2011 and completed in October 2012. Tangshan Caofeidian Shihua was founded in April 2011 and has yet to become fully operational. As a result of the acquisition, the number of crude oil terminal companies controlled or jointly-owned by Sinopec Kantons Holdings increased from two to seven, with the number of berths increasing from 14 to 24, according to the Hong Kong-listed group. Nine of these berths have capacity to accept VLCCs. The annual design capacity of the group’s controlled or jointly-controlled crude oil terminals increased from approximately 85 million tonnes to around 225 million tonnes. ‘Adding the five terminal companies to our portfolio, Sinopec Kantons now has a jointly-controlled presence in each of China’s top three coastal ports for crude oil loading and unloading,’ the group says. ‘With only a limited number of deepwater terminals in China and as the size of international oil tankers continues to increase, ownership of deepwater terminals that have the facilities to accommodate VLCCs and larger means Sinopec Kantons will have a significant advantage.’ In October 2011, Sinopec Kantons completed the acquisition of a 50% equity interest in Zhan Jiang Port Petrochemical Terminal. Zhang Jiang Port in Guangdong province is one of the major coastal ports of China and is a key transit hub port and a major water channel in southwestern

and southern China. The Zhan Jiang terminal complex includes oil tanker handling, crude oil, petroleum and petrochemical products unloading, storage and pipeline transmission facilities. It has 12 petrochemical berths, including one capable of handling up to 300,000 dwt oil tankers and a liquid chemicals berth able to accommodate up to 80,000 dwt vessels. Throughput capacity is 25.3 million

capacity will be sufficient to take advantage of these large shipment sizes to reduce the cost of sourcing as well as the transportation of crude and petroleum products direct from producers and the major trading hubs,’ Brightoil says. On Dalian’s Changxing Island in Liaoning province, the company is building an oil storage hub which will ultimately have up to 7.7 million m3 of storage capacity and be able to

The review and revision of safety requirements for oil storage terminals in China in 2011 followed a number of safety-related incidents across the Chinese oil industry tonnes. Storage capacity comprises 59 tanks, of which 52 are for oil and three for gas. Total storage capacity is approximately 506,100m3. The terminal provides oil unloading and petrochemical products storage services for Sinopec’s Maoming Refinery, Dongxing Refinery and North Sea Refinery, as well as for other third parties. China’s privately owned Brightoil Petroleum is continuing to develop its oil storage facilities on the mainland and elsewhere, including Singapore. The company, which considers itself the biggest private petroleum company operating in the Pearl River Delta area, has a portfolio of owned and leased facilities. In China, the current focus of Brightoil’s storage development is the construction of two oil terminals in Eastern and Northern China, at Dalian, Liaoning province and at Zhoushan, Zhejiang province respectively. ‘Both locations have deep water access capable of handling VLLCs. The installed

TANK STORAGE • December 2012

handle imports of crude oil and fuel oil in VLCCs of up to 300,000 dwt. The terminal is a joint venture with Dalian city’s Industrial Zone Management Committee. At Zhoushan, Brightoil is building a 3.2 million m3 oil storage facility and terminal on Waidao Island in the Yangtze Delta. The facility will have 15 berths to accommodate vessels from 1,000 dwt up to 300,000 dwt in a phased development. Brightoil wholly owns the tank storage at the terminal. Brightoil was forced to revise the schedule for both projects on account of the need to change their design standards in order to meet new oil terminal safety regulations. The review and revision of safety requirements for oil storage terminals in China in 2011 followed a number of safety-related incidents across the Chinese oil industry. Brightoil now expects commercial operations at the Dalian terminal to start in the second half of 2013 and commissioning of the Zhoushan terminal to begin in early 2013, with

commercial operations slated to start before mid-2013. Once completed, Brightoil plans to lease some of the storage facilities at both terminals in order to generate future revenue. LBC going it alone Many of the international terminal operators have entered the country’s terminal storage market by partnering with a local firm. LBC Tank Terminals was one such company, although it is now looking at going it alone and is actively pursuing greenfield projects and acquisitions in China. ‘LBC is committed to grow globally and more so in China,’ says Anthony Ho, general manager of LBC Shanghai Shipping Terminal. LBC first entered China in 2007, via a strategic partnership with Singaporebased Great Eastern Providence Group (GEP) when the two companies set up GEP Asia Terminals to acquire a 70% shareholding in a joint venture chemicals storage terminal in Shanghai. LBC took a 90% stake in GEP Asia Terminals and GEP held a 10% interest. LBC subsequently bought out GEP Singapore’s shareholding in GEP Asia and now owns 70% of LBC Shanghai Shipping Terminal. Shanghai Shipping, a subsidiary of China Shipping, holds the remaining 30% interest in the terminal. Sited at the mouth of the ChangJiang River at Wai Gao Qiao in Pudong Shanghai, LBC Shanghai Shipping Terminal now has 54 tanks ranging in size from 650m3 to 3,000m3, totalling 66,200m3 capacity. Ho says the company is adding another eight tanks of 1,000m3 to provide an additional 8,000m3 of storage as 1,000m3 is the local customer chemical delivery parcel size. LBC expects the expansion to be completed in April 2014. The company also currently

storage in China leases a further 72,000m3 of storage in Wai Gao Qiao. The jetty at LBC Shanghai Shipping Terminal was recently extended from 330 to 430m in length and the number of berths from two to three. The terminal can now handle two 35,000 dwt vessels and a 3,000 dwt ship simultaneously. In addition to seagoing ships, the facility can also receive barges. Occupancy rates at LBC Shanghai Shipping Terminal are typically over 80%. However, the company has no further expansion plans at the terminal beyond the ongoing expansion on account of the land at the site being completely utilised. Ho believes getting a good site with deep water, highway and rail access near to the markets are the biggest challenges. But he also conceded regulations pertaining to the building of new terminals in the country are getting stricter, with new regulations coming in and existing regulations being tightened. LBC Shanghai Shipping Terminal mainly handles import shipments, with the principal cargoes handled comprising products like dioctyl phthalate, monoethylene glycol, and aromatic solvents. He believes LBC could be adding petroleum tankage in the future, however. ‘There are demands that beckon us to add petroleum storage into our terminals,’ Ho says. ‘We expect China will open up its markets for petroleum in the near future in compliance with WTO.’ Vopak-SIDC tie-up Vopak has a 50% shareholding in the Vopak ShanghaiCaojing Terminal in Shanghai Chemical Industry Park. The facility has 362,696m3 storage capacity for petrochemicals and chemicals, as well as LNG with pipeline connections to nearby customers. Unlike

LBC’s facility, the Vopak Shanghai facility is an industrial chemicals terminal rather than a distribution terminal. Vopak is a joint venture partner in another five bulk liquids storage terminals in China and a full owner of a sixth storage terminal in Zhangjiagang, with a countrywide storage capacity currently totalling just over 1.3 million m3. Among its current projects on the mainland, Vopak is partnering with China’s State Development Investment (SDIC) to build China’s largest independent crude oil and oil products storage terminal to date. Vopak holds a 49% stake in the development. Construction work began on the RMB7 billion project at Yangpu in Hainan province in late November 2011. The joint venture aims to develop Vopak SDIC Terminal Yangpu, as the new facility will be known, into a break bulk and blending hub. Initial storage capacity will be 1.35 million m3 with two jetties serving it. The facility has sufficient land available for potential for expansion to up to 5.2 million m2 in the future. One of the two jetties will be capable of handling VLCCs. ‘With a VLCC jetty and excellent natural deep water access, this terminal will be the first independent third party oil storage terminal in south China that can receive and handle crude tankers of up to 375,000 dwt,’ Vopak says. The joint venture expects to commission the terminal in the first quarter of 2014. The current Yangpu Port terminal is close to 19 oil refineries, so the amount of crude oil coming in through the port could be as much as 90 million tonnes annually, according to China Daily. By 2015, the crude oil entering the port is expected to hit 130 million tonnes, the newspaper indicated. This means large development potential for the project.

The commissioning of Vopak’s joint venture Dongguan storage terminal in Guandong province has been delayed until the second quarter of 2014. The facility will have an initial storage capacity of 153,000m3 for chemicals and clean petroleum products, with jetties to handle both types of product. Vopak holds a 50% stake in the terminal, which is earmarked for an eventual future storage capacity of 400,000m3. Located on Lisha Island on the east bank of the Pearl River Delta, the new facility will be located in the economic heart of southern China. Vopak acquired its interest in the project via its acquisition of a 50% stake in Sealink Storage from Merit, a subsidiary of the Lanwa Group, an industrial investment company

international terminal operators with bulk liquid storage in China, Stolthaven Terminals operates two storage terminals in the country. One is on Daxie Island near Ningbo and the other is in Lingang near Tianjin. The company is currently adding 99,000m3 of storage capacity at Lingang and a further 138,000m3 is planned to be added at Ningbo. Odfjell, which already operates two joint venture bulk liquid chemical storage terminals in the country, at Dalian New Port and at Jiangyin, is developing a new terminal together with marine facilities at Nangang (Tianjin) in partnership with Nangang Port Company, a subsidiary of Tianjin Economic-Technological Development Area (TEDA). All told, the outlook for China’s bulk liquids storage

LBC Shanghai Shipping Terminal at Wai Gao Qiao in Pudong Shanghai based in Dongguan. Sealink owned 23.2 hectares of land at the site and a concession to build and operate a bulk liquid storage terminal on Lisha Island. With the addition of the Hainan and Dongguan terminals, the storage capacity of Vopak’s Chinese terminal network is expected to increase from 1.3 million m3 to over 3 million m3 in 2014. Among the other

demand remains good despite seven quarters of slowing growth in the country’s economy, which is now showing signs of stabilising and rebounding however, as demand for chemical products looks set to continue to grow. Moreover, despite the country’s efforts to expand domestic chemicals production capacity, China is expected to remain a net importer going forward.

December 2012 • TANK STORAGE

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Big

southeast asia

plans, but what is the reality?

With not all planned projects in Malaysia going ahead, David Hayes looks at the status of the proposed projects across southeast Asia Demand for tank storage in Singapore and Malaysia is expanding as traders build up petroleum inventories to improve their competitiveness in supplying customers in China and southeast Asia, where economic growth continues to lift consumption of fuels. The world’s refining capacity is moving east. Old refineries are closing in Europe and the US and new ones are opening in east Asia. The owners have invested to ensure they can meet specifications anywhere and supply their products everywhere. Building a new refinery creates a large amount of new petroleum production capacity in one go while the local market may expand more slowly. Exporting helps use surplus capacity with traders aiming to buy stocks when prices are low, ready to sell when prices are higher. ‘Traders in Singapore aim to supply everywhere,’ Chris Skrebowski, director of Peak Oil Consulting, says. ‘The Far East

market is growing most rapidly. By chartering a reasonably large tanker, traders can extend the range of where they send their petroleum cargoes.’ Singapore, with its large refining and petrochemical industries, still has the largest third party storage capacity in southeast Asia. However, with limited land area available to construct new tank storage in the future, new terminals are being built in the neighbouring Johor state in southern Peninsular Malaysia to cater for the overspill in storage demand. International third party terminal operators are not the only companies building storage facilities in Johor. Major international oil traders are building tank terminals through their independent terminal operating subsidiaries to ensure they have sufficient storage, as unused terminal capacity becomes more difficult to find in Singapore. For example VTTI, the independent bulk terminal storage company that is 50% owned by the Vitol Group and 50% by MISC Berhad, Malaysia’s international shipping conglomerate, is preparing to begin construction of its 220,000m3 Phase 2 expansion scheme at the recently opened ATB Tanjung Bin terminal in Johor state. ‘Following a $350 million (€270 million) investment, we successfully commissioned our ATB Phase 1 project

TANK STORAGE • December 2012

in April 2012,’ says Jasper Schmeetz, commercial manager at VTTI Asia. ‘We have 890,000m3 of storage capacity, of which 340,000m3 is for black products and 550,000m3 for white products. Our current throughput is 1.5 to 2 million tonnes per month. The terminal is performing very well operationally.’ Located on a 30 hectare section of a 50 hectare former mangrove forest site, ATB Tanjung Bin Phase 1 consists of 41 tanks ranging from 7,000m3 to 45,000m3 in size. The main tenants using the Phase 1 storage capacity are Vitol and Petronas, Malaysia’s national oil and gas company. ‘We have built a state-ofthe-art terminal within Asia’s largest trading hub. We offer to store and trade our clients’ products at price levels at parity with Singapore, but at cheaper operating costs in Malaysia,’ Schmeetz explains. ‘Combined with the deep draft and its rate of efficiency, receiving at ATB is up to 10,000 tonnes per hour and loading out up to 7,500 tonnes per hour. We have something to offer that cannot be found elsewhere in the market.’ The flow rates are four to five times faster than at a normal storage terminal due to ATB Tanjung Bin’s large pumping capacity and because of the large diameter pipelines that have been installed. ‘We have five jetties.

The largest is able to receive VLCC tankers and supports our clients in the fuel oil arbitrage business sailing large cargoes from northwest Europe and the Middle East to the Far East,’ Schmeetz says. ‘The larger the cargoes, the bigger the economies of scale. The terminal’s 340,000m3 fuel oil storage capacity is mainly for arbitrage, cargo blending and bunkering purposes.’ Vitol’s share of ATB Tanjung Bin’s Phase 1 capacity has expanded the trader’s regional petroleum storage capacity as the company kept its existing tank storage capacity in Singapore too. With ATB Phase 1 now fully utilised, VTTI is about to start construction of Phase 2 which is an add-on expansion of 220,000m3 capacity. ‘The tanks will be able to store all products including fuel oil and clean products such as distillates, mogas, methanol, MTBE and other low flash products. The tanks and pipes will be designed for maximum flexibility,’ Schmeetz remarks, noting that three more jetties will also be built to serve the terminal. The 220,000m3 of additional tankage will be built in two segregated pits with connections into Phase 1 and designed to carry out inter tank transfers. Construction is due to begin in January 2013 with completion expected by July 2014.

southeast asia Phase 2 tanks will range in size from 8,000m3 to 26,500m3 of which some tanks are due to be built with heating capability. ‘Phase 2 is for third parties. Likely customers are those currently renting offshore storage on the 13 VLCC tankers which are currently anchored at Pelepas in the Malacca Straits,’ Schmeetz says. ‘They could be looking onshore for storage as we can offer better flexibility, product segregation, blending capability and faster turns with eight jetties. Also, independent surveying companies are on site here. It’s more difficult to do tests offshore and get the results.’ The 13 VLCC tankers provide an estimated 4 million m3 of crude and petroleum storage capacity. VTTI will begin developing Phase 3 at ATB Tanjung Bin once Phase 2 is leased out. Phase 3 will be a petroleum or chemicals project with all the necessary permits already in place. Construction is expected to take 18 to 24 months. ‘Phase 3 will be 550,000m3. The tank sizes will depend on the client’s business,’ Schmeetz adds. ‘If it’s an oil major storing crude, six large tanks could do it but, if it’s a chemical company, it could be 50 tanks each about 1,000m3 in size. Unique for this expansion is that our customers get involvement in the Phase 3 design stage so we can cater the facility exactly to their needs.’ VTTI has an option to build four more jetties up to VLCC size at ATB Tanjung Bin. The company also plans to discuss with the Port of Pelepas about dredging the approach

channel which is now 17.5m. ‘We are looking to further dredge to 22-24m draught so even fully laden VLCCs can make their first port call straight at our jetty,’ Schmeetz says. Not all terminal projects in Malaysia are proceeding so smoothly, however. Muhibbah Engineering, for example, continues to look for a way to revive its stalled 924,000m3 Asian Petroleum Hub (APH) integrated storage terminal project in Johor. Privately-held APH, led by a consortium including KIC Oil and Gas which operates the 220,000m3 KIC Oil Terminal in Westport, Port Klang, was put under receivership over 18 months ago after costs escalated and additional investment was sought. Muhibbah is still optimistic about the viability of the long delayed project in which the company was the second largest creditor, but it will need other investors if the terminal is to be built. China Aviation Oil (CAO), meanwhile, has pulled out of a joint venture scheme with Malaysia’s MISC and Dialog Group to construct a 380,000m3 storage terminal at Tanjung Langsat Port Terminal 3 in Johor to store middle distillates and fuel oil. CAO, which imports over 95% of China’s aviation fuel needs, announced in August that it considered the Tanjung Langsat project no longer commercially viable. In addition to importing jet fuel, the group recently has increased trading activities in gasoil, petrochemicals and fuel oil. To support its trading

VTTI’s Tanjung Bin terminal in Johor state, Malaysia

operations, CAO is continuing to look at oil storage leasing and investment opportunities in the Singapore hub area that includes Johor, Batam island in Indonesia and Singapore itself where the company already leases storage capacity. Although the joint venture has ended, Dialog Group still intends to develop a storage facility at Langsat Terminal 3 where a lack of infrastructure is believed to be the main factor causing CAO to withdraw from the scheme; specifically, two unbuilt tanker berths and dredging of the berth pocket and ship turning basin that was due to be completed by the port authority. Once these issues are resolved, Dialog is expected to look at developing the storage terminal again to serve a customer with similar needs to CAO. Dialog already operates two storage terminals in partnership with Vopak. On the east coast of Peninsular Malaysia at Kertih, tanks capable of storing 396,000m3 of chemicals and liquefied gas are in service while at Pasir Gudang in the far south of Johor state tanks designed to hold 20,000m3 are in operation. The two companies are working together to develop a third terminal project, also in Johor. Dialog holds a 51% stake and Vopak 49% in Pengerang Terminals which, in turn, owns 90% of Pengerang Independent Deepwater Terminal, one of Malaysia’s key economic transformation projects that is intended to develop southeast Johor into a regional oil storage and trading hub. Johor state government owns the remaining 10% shareholding in Pengerang terminal where construction is underway to provide an initial 1.3 million m3 storage capacity that will be used to hold crude oil and petroleum products. Due for commissioning in early 2014, Pengerang is being built to receive tankers up to

VLCC size at six berths with drafts of up to 24m. Sufficient space is available to add a further 1 million m3 storage capacity in future, lifting the eventual capacity to 2.3 million m3 Apart from the Pengerang terminal project in Malaysia, Vopak is expanding its chemical storage capacity in Singapore where the company operates almost 3 million m3 of petroleum, chemical and gas storage facilities. ‘We are always on the lookout for expansion opportunities,’ Patrick van der Voort, president of Vopak Asia, says. ‘One project is a 100,000 m3 expansion of our Banyan terminal in Singapore to service a nearby chemicals plant. The target completion is Q1 2013 and we are on schedule.’ Vopak’s Banyan terminal currently offers 1.26 million m3 of oil, gas, biodiesel, chemicals and gas storage capacity. The company’s other large Singapore facility is the Sebarok terminal which also offers 1.26 million m3 of petroleum product and chemical storage capacity. Indonesia In a new development, Sinopec of China recently announced plans in October to take a 95% shareholding in the PT West Point terminal project in Batam island Free Trade Zone (FTZ) in Indonesia, near to Singapore. The $850 million investment is intended to boost Sinopec’s petroleum trading activities in the region. Some 360 hectares of land in Batam FTZ

December 2012 • TANK STORAGE

southeast asia expects oil consumption to continue growing at 9% to 12% a year,’ comments one third party tank storage manager who tracks Vietnam’s emerging petroleum market with interest. At present about 12 oil importers supply the majority of Vietnam’s fuel import Vopak’s first terminal in Asia – Sebarok, Singapore

An artist’s impression of Vopak and Dialog’s jointly owned Pengerang terminal, due for commissioning in 2014 has been allocated to the 2.5 million m3 PT West Point terminal and related refinery and petrochemical projects that are due to be built in the second phase of development. Whether Sinopec’s plans to develop petroleum storage capacity on Batam come to fruition remains to be seen however, as industry sources say the company still has not received approval from Beijing to move ahead with the project. South Korea Oiltanking Odfjell Terminal Singapore (OOTS) operates 365,000m3 of chemical storage capacity consisting of 79 tanks ranging from 800 to 18,000m3 capacity including eight stainless steel tanks. Other facilities include five marine berths for vessels up to 80,000 dwt and six loading bays for road tankers. OOTS faces competition from storage terminal operators in Ulsan, South Korea, though Odfjell also has its own terminal there. ‘A lot of chemical cargos are produced on Jurong for export. Three companies here, for example, are making rubber tyre products for export to Thailand and Indonesia,’ a source says. ‘A lot of chemical plants are still being built on Jurong and Jurong Aromatics is still to be built. ‘Singapore covers southeast Asia and south China, while Ulsan Port third party terminals cover mid and northern China. Some products we ship from

Singapore to southern China.’ Apart from locally produced chemicals, other cargos come from the Middle East and Europe for distribution in Asia and into China. Clients use Singapore as a hub for storage and then small ships take the cargos to their destination. ‘Some chemical products are hubbed in Singapore but more in Ulsan as it is cheaper for customers,’ the OOTS source says. ‘There is huge demand for chemicals in Singapore, which keeps storage prices high. A lot of tank storage has been built in Ulsan. This is the reason South Korean storage prices are dropping while Singapore prices are high.’ Myanmar and Vietnam Myanmar recently has joined Vietnam as Asia’s next likely Tiger economy candidate and will rely on growing oil imports to sustain its forecasted economic growth pattern. ‘Vietnam’s oil consumption is growing from 9% to 12% a year for transport use and diesel oil for factory and transport use, and fuel oil use for bunkering and power plants. The government

TANK STORAGE • December 2012

needs. Most of them are state-owned organisations including Petrolimex, PV Oil under PetroVietnam, MIPEC and MIPECO. Total petroleum storage capacity in Vietnam’s three main importing regions is estimated at about 2.3 million m3. All storage is captive capacity. No independent petroleum terminals operate in Vietnam at present. Terminals at Ho Chi Minh City and Vung Tau combined provide about 1 million m3 storage capacity while terminals in Danang and Nha Trang in central Vietnam have about 500,000m3 storage capacity combined. In northern Vietnam, terminals in Haiphong and Quang Ninh offer about 300,000m3 storage combined. Vietnam’s petroleum storage capacity is believed to be increasing as Vietnam National Petroleum (Petrolimex) was due to begin operations mid-year at its new 505,000m3 Van Phong bonded oil terminal. Installed with 29 storage tanks in southern Khanh Hoa province, the terminal is designed to store 230,000m3 of gas oil and 125,000m3 of petrol. Built with four jetties capable

of accommodating vessels up to 150,000 dwt, the terminal also has sufficient capacity to store 150,000m3 of fuel oil. According to petroleum industry estimates, anywhere from 500,000 to 1.2 million m3 of third party petroleum storage capacity could be needed between now and 2020 depending on oil consumption growth. In August, Vietnam Prime Minister Nguyen Tan Dung approved plans by Petrolimex to construct new oil storage facilities across Vietnam at a cost of VND4.2 trillion during the 2011-2015 investment plan period. Third party operators believed to be looking at petroleum storage terminal opportunities include Vopak, Oiltanking and Odfjell. Myanmar also is expected to have large petroleum import needs as the economy begins to grow again, now that the country’s military leadership has allowed free elections and slowly is starting to build bridges with the international community. ‘The place everyone is talking about is Myanmar on the electric power side. This is because it has a huge potential coming from a low base,’ the third party manager says. ‘Myanmar has got natural gas but it has sold it to Thailand and China, so they need petroleum imports. There is some land earmarked south of Rangoon, the former capital and business centre.’ How quickly Myanmar develops remains to be seen. Until now military backed companies have implemented many infrastructure schemes in Myanmar and this pattern may be followed for storage terminals, possibly in partnership with an international player. Terminal development is likely to be modest initially, with tank storage companies not wishing to over commit while local infrastructure to deliver and use petroleum imports also needs to develop.

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india

Vopak entered the fast growing Indian market in 2011 by acquiring two privatelyowned terminals in Kandla Port

State-run companies look to the independents for storage needs by David Hayes

India’s third party tank terminal market could be about to enter an important expansion phase as government-owned petroleum companies look for storage capacity in new locations to supply the growing demand for vehicle and industrial grade liquid fuel developing across the country. Working with tighter investment budgets than India’s private energy companies, state-run Indian Oil Company (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) are considering working with third party terminal operators rather than building their own tank farms to meet their internal growing requirement

for new storage capacity. ‘We are looking at inland terminal possibilities,’ says Sanjiv Lele, general manager for western India at IMC, India’s largest third party terminal operator. ‘These inland terminals would supplement storage facilities for government oil companies who have their own cross-country fuel pipelines and distribution facilities. They can use private companies to provide terminal capacity at a better cost, rather than taking a risk themselves. ‘There are discussions going on but nothing concrete yet. It may happen as government petroleum companies are serious about this.’

TANK STORAGE • December 2012

India’s three state-run petroleum companies operate independently, competing with each other and private oil companies to increase sales and market share. With economic growth boosting demand for vehicle and industrial fuel, petroleum companies are looking to increase the storage capacity that they can use in locations that improve their competitive advantage against other suppliers. ‘In Mumbai, for example, IOC has a better storage depot location than others,’ Lele notes. ‘The thinking is, why invest in storage? Why not use a professional liquid storage company instead?’ In addition to growing domestic petroleum demand,

India’s refining industry’s exportable surplus is also expected to create demand for additional storage capacity in future as more traders become involved. ‘West coast India is strategically placed – crude comes from the Arabian Gulf, refineries are there and they export a surplus. India has set itself up as a petroleum export centre. They can refine and export at a profit,’ comments Chris Skrebowski, director of Peak Oil Consulting. Reliance Industries operates the world’s largest refining complex at Jamnagar in Gujarat State, western India with an aggregate refining capacity of 1.24 million barrels per day (bpd). ‘Reliance built a refinery

india in March 2012. The terminal site has sufficient land to provide up to 300,000m3 storage capacity depending on the tank sizes installed. ‘At Ennore we can add 70,000m3 to 100,000m3 more capacity depending on the class of cargoes and the size of tanks built,’ Lele says. ‘At our Ennore terminal we have bigger tanks including 10,000m3 and 15,000m3 tanks as a large demand for storage is expected. 10,000m3 tanks are used for petroleum and edible oil is generally stored in 12,000m3 tanks. Chemicals require smaller tanks as they come in 1,000-2,000m3 batches. ‘Now we mostly store chemicals at Ennore but we expect more petroleum products with our recent

terminal, which stores mostly aviation fuel. IMC estimates that third party storage capacity in India currently exceeds 3 million m3, of which the company itself accounts for about one third of total storage capacity countrywide. Apart from a growing number of terminal owners with tanks at two or three ports, India’s third party storage industry is characterised by a large number of small single terminals owned by local entrepreneurs. Some own modern facilities, while other small terminals are more basic. ‘There is bigger storage capacity on India’s west coast but Ennore Port and

Third party storage capacity in India currently exceeds 3 million m3

Sanjiv Lele, general manager for western India at IMC of India

at Jamnagar designed for maximum diesel output. It’s 40% there while other refineries are 25% or less. This was a conscious and smart decision. They send about 100,000 bpd to Europe where there is a diesel shortage,’ Skrebowski notes. Anticipating demand Anticipating that demand for petroleum storage capacity will rise on India’s east coast as economic growth lifts fuel demand across the country, IMC completed a 75,000m3 Phase 2 expansion scheme earlier this year at its Ennore tank terminal near Chennai

(formerly Madras) in Tamil Nadu state, southern India. The company opened the terminal in 2009 to expand storage capacity in southern India as the company’s nearby 63,000m3 Chennai storage terminal is operating at full capacity and there is no land nearby to build new storage tanks. The Ennore terminal was built as a joint venture 30 year Build, Operate and Transfer (BOT) scheme with India’s leading engineering and contracting firm, Larsen and Troubro. Work expanding the terminal to 200,000m3 from 125,000m3 was completed

expansion now completed,’ Lele says. ‘In future we expect it will be 40% petroleum products and 60% chemicals stored. Now it is 75% to 85% chemicals which are imported.’ This is the company’s first to be built with a jetty. ‘Chennai Port is congested with coal for power stations so our jetty is a dedicated liquid cargo jetty. Our jetty can handle 3.5 million tonnes a year of liquid cargos,’ Lele remarks. In addition to IMC, Reliance Industries uses the Ennore jetty to serve the company’s nearby petroleum distribution terminal, which previously used Ennore Port’s old jetty to unload petroleum cargoes. Reliance uses the Ennore jetty for discharge only through dedicated pipelines to fill fuel tanks in the company’s nearby 70,000m3 capacity distribution

other private ports could grow as our east coast is closer to southeast Asia from where a lot of chemical imports are coming,’ Lele says. IMC is the largest third party terminal operator in India and the only independent national player serving all 12 of the country’s busiest sea ports. IMC’s current storage capacity totals about 1.1 million m3 at the 22 terminals the company operates, with the total number of tanks installed numbering about 288. The 12 major ports where IMC has tank farm facilities are Kandla in northeast India; JNPT and Mumbai Port Trust in western India; Goa, Karwar and Mangalore in southwest India; Cochin and Tuticorin in south India; Chennai and Ennore in southeast India; and Kakinada, Vizag, Haldia, Budge Budge and Kolkata (formerly Calcutta) in eastern India.

December 2012 • TANK STORAGE

india IMC’s largest facilities are at JNPT where the company’s 43 tanks offer 169,000m3 of storage capacity followed by the recently expanded Ennore terminal and Haldia terminal where 30 tanks can hold 118,400m3. Elsewhere, in Kandla old port, IMC’s No 2 liquid terminal can store 112,230m3 and the nearby No 1 liquid terminal 25,320m3. ‘Business is good. Chemical imports are going up,’ Lele says. ‘Demand for storage is good. ‘Nearly all our tanks are mild steel tanks. At Haldia terminal there are some stainless steel tanks dedicated to Mitsubishi Chemical long term. It’s expensive to do that, so unless some customers want a long term contract it’s not worth it.’ As part of efforts to upgrade operations IMC aims to obtain ISO accreditation for all of its terminals. ISO 9001 certification was obtained for the Haldia and Kandla terminals in 2008 followed by Mangalore in 2009. IMC has also set its sights on gaining ISO 14000 certification for its terminals to meet increasingly higher operating standards that many multinational clients require. ISO 14000 certification has been completed for Mangalore terminal, Lele reveals, with ISO 14000 documentation just completed for the JNPT terminal. The next terminals to begin the ISO 14000 certification process will be Kandla and Haldia. ‘Environmental standards are increasing in India and more regulations are becoming tougher,’ Lele says. ‘As we handle liquids we must have effluent treatment plants. In future each terminal must have an effluent treatment plant or be able to use one in a port.’ Vopak entered the Indian market last year by acquiring CRL Terminals’ two

privately-owned storage terminals in Kandla Port. According to Vopak, the two terminals offer 265,000m3 of storage capacity. Facilities include 121 mild steel and stainless steel tanks in sizes ranging from 172m3 up to 7,000m3. Berths for five vessels are available with the draught available being 9.5m to 10.7m. In addition to receiving cargos by marine tanker, Vopak’s Kandla terminal has truck loading and unloading facilities, and railway loading at its vegetable oil terminal. ‘Looking at the population of India, it is obviously a market with growing demand for petroleum, petrochemical and vegetable oil products,’ comments a Vopak India spokesman. ‘Part of this demand is taken care of by local production and a significant part of

decision not to stay in the storage terminal market. Other companies were interested in purchasing the Kandla terminal facilities as well until Vopak submitted the winning offer. The price offered was more than Indian companies were willing to pay and since then has prompted some other terminal owners to check the approximate value of their own storage facilities. ‘I don’t see much opportunity for acquisitions. There are a lot of privately owned terminals. But they see the Kandla terminal sale and they think to sell their own terminal,’ Lele says. ‘There have been a couple of discussions, but just to assess the terminal’s market value. There is one company interested in selling about 120,000m3 of storage facilities in several locations.’

Land and other costs are high for potential investors, deterring many newcomers from entering the market the demand is imported from the Middle East and Far East. This presents a number of opportunities on the tank storage side. ‘In July 2011 we made our first step in India by acquiring two terminals in Kandla, Gujarat, with a total capacity of 250,000m3. The terminals store petrochemical and vegetable oil products. Kandla is the largest liquid port in India and, as such, we believe we have made the first step in establishing our footprint in India in the most relevant location.’ Vopak’s Kandla Port storage terminals acquisition followed the death of CRL Terminals’ founder and the family-owned company’s

TANK STORAGE • December 2012

Land and other costs are high for potential investors, deterring many newcomers from entering the market. Another international third party terminal company with operations in India is Oiltanking, which set up Indian Oiltanking in joint venture with state-owned IOC in 1997. Indian Oiltanking opened a bulk liquid terminal at the town of Navghar close to JNPT near Mumbai one year later which currently has storage tanks capable of handling 250,000m3. Another 45 acres of land is available for future storage tank construction. According to Oiltanking, ocean going vessels up to 60,000 dwt can receive or discharge cargoes

through the terminal’s two jetties. Sixteen tanker truck loading bays have been installed along with a modern rail car loading and unloading facility. Elsewhere, Oiltanking has jointly invested with Zuari Industries of India in a 71,000m3 storage terminal in Goa, western India, that stores various petroleum products including naphtha. The terminal has a jetty that can accommodate vessels up to 60,000 dwt and has a direct pipeline connection to supply Zuari with feedstock for fertiliser production. Meanwhile, India’s growing edible oil imports also require storage terminal capacity at major seaports through which cooking oil enters the country. ‘We have large edible oil imports through the east and west coasts that will continue to grow whether the economy is good or not,’ Lele says. ‘India gets about 10 million tonnes of edible oil imports a year. It’s a lot to handle and it will grow in future.’ The bunkering market is another area of interest to tank storage companies, though bunkering has not developed greatly due to unfavourable local oil prices. Lele points out that JNPT Port, for example, is one of India’s busiest ports with more than 3,000 vessels calling each year. ‘If just 10% or 15% of that number were for bunkering it would be a big volume,’ Lele says. ‘We are in touch with Trafigura and Glencore in India. If things happen we are ready.’ Chemoil, in fact, operates a bunkering service covering western India based at the company’s Port of Mundra terminal in Gujarat State. The Port of Mundra is the largest private port in India. The terminal has eight tanks ranging from 3,000m3 to 15,000m3, totalling 90,000m3 in capacity.

singapore

With space already tight on Jurong Island, terminal operators are eagerly awaiting news on the region’s space saving initiatives. Tank Storage magazine talks to JTC to find out the latest on its underground rock caverns

Jurong Island: breaking ground in the literal sense

Singapore’s Jurong Rock Caverns (JRCs), when complete, will provide 1.47 million m3 of storage space and free up 60 hectares of land on Jurong Island, providing enough space to house up to six petrochemical plants. So it is no surprise that operators and producers alike are keen to see the project develop. Construction on the JRCs started in 2007 and JTC Corporation Singapore’s principal developer, is in charge of the project, and was hoping to get an operator on board by the second half of 2012. It had pre-qualified, established players like Vopak and Horizon Terminals back in 2007 but was forced to delay the process with the arrival of the global financial crisis in 2008. The process to ensure that the chosen operator is capable and qualified to manage the caverns is a long one but the JRC operatorship contract is still scheduled to commence in 2013. JRC has, however, secured

its first customer in Jurong Aromatics (JAC), which is building a petrochemical complex on Jurong Island. Located more than 100m below ground, phase one of the JRC project should be complete in 2014. It comprises five caverns which will have the capacity to hold the equivalent of approximately 9 million barrels, or 580 Olympic-sized pools. Underground development in Singapore is still in its relatively early stages. With underground development there are higher construction and operating costs, longer lead times for construction and new design standards and safety codes customised for underground development. ‘The excavation of the underground tunnels and caverns, as well as construction for the aboveground structures such as the jetty and ancillary buildings, are in full swing. The aboveground and underground associated oil storage process facilities, which consist of piping, mechanical,

electrical and instrumentation installations, have also commenced,’ explains David Tan, JTC’s assistant CEO for the technical and professional services group. This is southeast Asia’s first underground oil storage facility to store liquid hydrocarbons such as crude oil, condensate, gasoil and naphtha. The key challenge in the construction of the JRC is the uncertainties encountered during underground excavation works. This is due to the varying geology of the rocks, for instance, the presence of fault lines which leads to possible excessive water ingress. It is important to carry out detailed and extensive site investigations before and during construction to have a better understanding of the ground conditions. For example, as the JRC is located beneath a water body, there is a risk of high water seepage into the caverns during construction. Hence, before excavation, holes are drilled 15m into the rock face to detect the

presence of water. These are known as probe holes. Based on the results of the tests, systematic grouting will be carried out to reduce the water ingress. This involves drilling a number of 15m deep holes around the groundwater ingress zone and filling up the cracks and fissures in the rock with a cement-water mix. This is done in order to stabilise and reduce the amount of water that enters the caverns. For the excavation of the tunnels and caverns, the drill and blast method is deployed and on-site verification of the design and construction methods are required to adapt to the underground conditions during construction. At a depth of 100m below the ground, the JRC is not affected by the rising sea levels. Safety is of utmost importance in this project. There are extensive risk management programmes put in place, together with a checklist of safety procedures and guidelines. For example, after each blasting, the tunnels and caverns have

December 2012 • TANK STORAGE

singapore to be ventilated and the air quality is checked before access is allowed into the area where blasting has taken place. At other critical work locations, besides having gas meters to monitor the air quality continuously, periodic manual air checks are also carried out every four hours to ensure that it contains safe levels of oxygen and that it is free from toxic elements. The caverns are located at ground level and have an average height that

its subsidiary Stolthaven Singapore, has expanded its global network of chemical terminals with a new S$350 million (€225 million) storage terminal on Jurong Island which opened in November 2011. It will be Stolthaven’s fifth terminal in Asia and has a storage capacity of 354,000m3, providing third party terminalling services to the new manufacturers at Tembusu, further reinforcing Jurong Island’s leadership position in the chemical industry.

is equivalent to a nine storey building. The Jurong Rock Caverns are located 130m below the Banyan Basin of Jurong Island. New developments on Jurong Island Singapore is a city-state with a land area of about 710km2.

The JRC operatorship contract is still scheduled to begin in 2013

Jurong Island is at the heart of Singapore’s energy and chemicals industry, home to more than 100 leading global petroleum, petrochemical and specialty chemical companies. Jurong Island boasts a set of integrated infrastructure solutions ranging from the network of common pipelines, to jetties and storage facilities on the island. Several storage terminal operators located there offer more than 6 million m3 of oil storage space. Stolt-Nielsen, through

Sumitomo Chemical, the largest Japanese investor on Jurong Island with over S$3 billion of cumulative investments, broke ground on its new solution styrenebutadiene rubber (S-SBR) manufacturing plant in February 2012. The S-SBR plant is Sumitomo’s first synthetic rubber plant built outside Japan. The plant is scheduled to be completed in 2013 and is expected to have an annual production of 40,000 tonnes of

TANK STORAGE • December 2012

specialty rubber. With the S-SBR plant, Singapore is now one of the largest manufacturing sites for synthetic rubber globally. Zeon broke ground in September 2011 on Jurong Island for its new S$240 million S-SBR plant. The project is the Japanese company’s first physical investment in Singapore and will occupy a total land area of eight hectares. The availability of feedstock from petrochemical crackers on Jurong Island as

well as the proximity to Asian customers, namely global tyre manufacturers, influenced the company’s decision to base its latest plant in Singapore which is scheduled to start-up by July 2013. Singapore Oxygen Air Liquide, the world’s largest industrial gas player, completed a S$500 million expansion on Jurong Island in December 2011. The expansion included the largest hydrogen product plant in Southeast Asia, an air separation unit that increases the company’s production capacity by 50% and an extension of its hydrogen pipeline network. Jurong Aromatics Corporation is set to open a world-scale aromatics complex in Singapore. The construction of the S$2.9 billion facility on Jurong Island has commenced and is expected to start operations in 2014. The facility, consisting of a fully-integrated condensate splitter and aromatics plant, is set to produce about 1.5 million tonnes per annum (tpa) of aromatics and 2.5 million tpa of petroleum products. Its 800,000 tpa paraxylene production is one of the largest in the world.

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From the track to the tank TANK TANK STORAGE STORAGE •• December December 2012 2012

Safety is at the heart of the oil, gas and chemical industries. Firms are constantly assessing how to improve the safety and reliability of their equipment to ensure the protection of people, buildings and assets. However, some equipment is often overlooked. Hoses are used for the transfer of fuels, chemicals and hazardous liquids. This can be ship to shore, ship to ship, ship to tank, plant to truck, truck to tank, in plant and rail car transfer. Mainly because of a lack of engineering expertise and knowledge of alternatives, a large number of low grade hoses are specified for these purposes. While these hoses may seem superficially attractive because of their low cost, in reality they are a weak link in a hazardous environment. The lack of investment in their testing and production means they are inflexible, often too heavy and weak, and costly to repair and maintain. Some composite hose types appear initially to look tough and robust due to their ‘bulk’. But when stripped apart to see the layers used they turn out to be cheaply bulk produced raw materials which do not possess the correct tensile strengths to provide the needed labyrinth sealing and tensile strengthening systems. Ultimately they cannot provide

the highest level of safety that the latest advances in engineering can offer. Formula 1 The importance of composite hose technology was thrust to the forefront of world attention in 1994. Stopping to refuel during the German Grand Prix in Hockenheim, Jos Verstappen was moments later engulfed in flames. The images, which were beamed around the world, threatened to blight the sport. An enquiry into the cause of the blaze noted that the fuel loading hose had failed catastrophically causing fire to spread wildly endangering lives and assets. Fortunately on this occasion no-one was seriously injured. Nevertheless a radical solution was urgently needed if the sport was to continue safely. At that point a leader in composite hose technology Dantec contacted Fomula 1 offering its Firesafe product, which is designed not to disintegrate in a fire. Formula 1 placed an order the following day which was pushed through in time for the next race. From that point on every F1 team used the hose for refuelling for over 15 years. The hoses supplied to Formula 1 teams were

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page header hoses made of a series of specially designed ceramic cloths and heat reflective films to counter the radiant heat effects of the fire. Resistant to temperatures up to 1,200°C for in excess of 30 minutes, the Firesafe hose retains all of the advantages of composite hoses including flexibility and durability. Critically the hose allows vapour to burn off slowly as the increased heat of the liquid inside the hose vapourises and seeks to escape. Ordinarily sustained heat combined with the inability of vapours to escape would heighten the risk of fire or explosion – however Firesafe allows the product to burn off gradually as vapour presents itself to the atmosphere. The fire retardant hose remains intact and will not forcefully expel its contents. This engineering therefore prevents the fuel hose adding to the fire even in extreme conditions. Malaysia – BASF Petronas BASF Petronas’ €900 million 150-hectre Gebeng site located in Pahang, Malaysia is one of the largest integrated chemical sites in the Asia Pacific region. Its facilities include a port tank farm area designed to facilitate storage and production of crude acrylic acid for the plastics processing industry. BASF Petronas is principally a producer of raw materials for use in a wide range of consumer products. These end-products include plastics, adhesives, paints, lacquers and paper. In the searing heat of the Malaysian sun, increased temperatures present a heightened fire risk when dealing with hazardous and highly flammable liquids. Vapour that escapes from fuel has a greater chance of meeting with a static charge, igniting and creating a fire or explosion. The importance of using the highest quality composite hose technology

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Dealing with a volatile product in such a high hazard environment requires a safe, high end product to guarantee continuity of operations cannot be understated in this environment. Dealing with a volatile product in such a high hazard environment requires a safe, high end product to guarantee continuity of operations. In order to eradicate the risk of a blaze, BASF Petronas also uses Dantec’s Firesafe hose. The hose uses a series of nonasbestos barriers to conductive and radiative heat to achieve fire retardant credentials. The design and high tech composition enables fuel vapour to escape and burn off at a constant rate, preventing any eventual collapse of the hose which could, quite literally, add further fuel to the fire. 14 years of partnership Tank storage is managed on a massive scale at Simon Storage’s vast Imminghambased complex in the UK which operates over two sites. The combined capacity of 623,000m3 across 243 tanks can cope with almost any liquid or gas storage

requirement. It features specialist stainless steel tanks up to 14,000m3 and carbon steel tanks, some equipped with internal floating decks. Liquids can be taken to and from market via road, rail and jetty links. Overseeing the regular loading and unloading of volatile liquids including fuels, acids and chemicals, the requirement for transfer means there is a constant need for composite hose. Simon Storage has used Dantec hoses for more than 14 years. Dantec supplies, maintains and refurbishes composite hoses for the entire operation. At any one time some 500 hoses are in operation over the two sites. The liquids being transferred include acids, biofuels, petrol and sulphuric acid. Maintenance of the hoses requires constant vigilance, training and inspection. In order to guarantee client satisfaction and eradicate the risk of catastrophic failure, Dantec spends a week at each site every year inspecting the hoses. The best initial means of

testing a hose is to conduct a visual inspection. This gives the engineer a very good indication if the hose will pass or fail a test. If the visual inspection fails, the hose is immediately taken out of service and replaced. Having passed a visual inspection however, the hoses are further examined to see if they are robust enough to handle the required pressure. The hoses are placed under a static pneumatic load test using either nitrogen gas or air depending on the service duty of the hose. This cleans out deposits or build up of discharge reducing the risk of static creating a spark. Throughout the 14 year partnership, neither company has ever recorded a catastrophic failure of a hose.

For more information:

This article was written by John Laidlaw, managing director, of UK based composite hose manufacturer Dantec, www.dantec.com

December December 2012 2012 •• TANK TANK STORAGE STORAGE

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Oil and gas

Measurement technologies and the

connectivity solutions you require. FMC Technologies delivers logistic measurement solutions for liquid petroleum and gas applications. Our solutions provide our customers with world class electronics for reliable, accurate and mission critical information. This includes Smith Meter® brand custody transfer flow measurement with Ultrasonic, Positive Displacement, and Turbine Meters, as well as compact skid solutions for loading, unloading and blending applications. See for yourself how we measure up at www.fmctechnologies.com/skidsts

TANK STORAGE • December 2012

Tank Storage Asia exhibitor preview

Celebrating its fourth year in

Singapore Now in its fourth year, the Tank Storage Asia Conference and Exhibition will be held on 11-12 December in Singapore, a central hub of the international petroleum trade. With speakers from Gulf Petrochem, Z-Energy and Jurong Consultants, this is a must-attend event for terminal operators, traders, regulators and equipment suppliers

Aker Cool Sorption manufactures vapour recovery systems which capture and treat environmentally damaging hydrocarbon vapour emissions, thereby minimising the release of hazardous substances to the atmosphere and recovering the valuable fuel products that would otherwise be lost. Aker Cool Sorption is a division of Norwegian company Aker Solutions, which offers a range of vapour recovery solutions for applications such as truck and rail-loading terminals, tank balancing systems and on- and off-shore marine terminals and product transfer operations. Aker Solutions’ Depot series of vapour recovery systems are a range of

low-cost units designed for the fuel distribution terminal business. The range covers seven pre-engineered designs that will cover most depot loading applications. In addition to the Depot Series systems, the Terminal Series VRU product range has recently been launched. The Terminal Series concept parallels the Depot Series, as a pre-engineered solution, specifically targeted at larger applications as may be found in ship loading or tank filling applications. n Visit Aker Solutions at stand D7. Alert Disaster Control is an international emergency response and integrated risk management solutions

services company. With 30 years’ experience, Alert’s operations encompass the provision of specialists/ engineers, equipment and systems. The company’s products involve oil well fire fighting and blowout control; critical well integrity; well control/relief well engineering and project management; marine and industrial fire fighting; hazardous materials control; integrated risk management consultation services; safety, survival and technical training; toxic environment protection; fire and safety manufacturing; and product sales. Alert serves a number of industries worldwide, including petrochemical, refining, terminals, aviation

December 2012 • TANK STORAGE

Tank Storage Asia exhibitor preview and construction/fabrication. n Visit Alert Disaster Control at stand D1. Ateco Tank Technology specialises in the design, manufacturing, supply and installation of products and systems used in the safe and effective transfer for storage of chemicals and hydrocarbons. Ateco’s mission is to support the design, manufacturing, supply, installation and maintenance of products and systems for industrial liquid transfer and storage. Particular emphasis was given to developing a product line for atmospheric storage tanks, such as geodesic domes, internal floating roofs, tank seals, drain systems, floating suction systems and oil skimmers. The company offers a variety in products for the tank storage industry, including: • Aluminium geodesic dome roofs for storage tanks • External floating roof drain systems • Floating roof drain seals for both internal and

external floating roofs • Aluminium internal floating roofs (non-contact and full-contact type ) • Floating suction systems, oil skimmers, swivel joints and loading arms • External floating roof emission control devices • Special tank products. n Visit Ateco Tank Technology at stand D6. Bornemann’s pumps and systems provide solutions for oil and gas applications. The company also has experience with multiphase boosting and wet gas compression. n Visit Bornemann at stand B1. Vapour recovery systems supplier CarboVac has developed an innovative technology comprising dry screw vacuum pumps in its existing 1998 vapour recovery unit. Its recovery systems are suitable for truck, railcar, marine loading facilities and petroleum product storage terminals. CarboVac’s reliable systems consume low levels

TANK STORAGE • December 2012

of energy and have a long carbon lifetime expectancy. n Visit CarboVac at stand B18. Dantec, a specialist in composite hose technology and innovation, manufactures a range of composite Firesafe hoses. Recently Dantec has introduced a new range of composite hoses for use within the biofuels industry, particularly biodiesel, where traditional hoses are not suitable. Other products include Mann Tec dry-break couplings and valves, rubber LPG hose, convoluted stainless steel bitumen hose, rubber reeling hoses and electrical insulating flanges. n Visit Dantec at stand C3. Dynaglass Reinforced Plastic’s fibre reinforced plastic composite products are suitable for use in a variety of industry applications. The company’s experience spanning over four decades means it has the required knowledge

to introduce new products using composite materials. It has recently launched its new model of internal floating roof, patented and branded as Vap-O-Loc Fire Wall. This incorporates the construction of a hermetically sealed rigid wall that extends around the edges of the sandwich core construction. n Visit Dynaglass Reinforced Plastic at stand C10. Rosemount Tank Gauging, a division of Emerson Process Management, develops inventory management solutions for bulk liquid storage facilities. Emerson has over 30 years in the industry, offering consultation and solutions for any phase of a tank gauging project to help increase efficiency and accuracy and reduce costs and risk of overfill. Key applications include custody transfer, inventory assessment and/or operational control of tank farms at refineries and terminals. Other common use-cases are mass balance and loss

Tank Storage Asia exhibitor preview estimation, leak detection and overfill prevention. Emerson’s tank gauging system is based on accurate and maintenance-free noncontacting Radar technology. It delivers both standardised volume and mass besides level, average temperature, pressure and other measured data through a user-friendly operator interface. The company’s scalable Rosemount Raptor tank gauging system is based on open communication technology and features: • Safety solution with SIL3certified radar level gauge • The reduced wiring and 2-in-1 radar helps lower costs • WirelessHart (IEC 62591) communication with mesh-network technology • Integrates into almost any system and easy step-bystep replacement of old mechanical gauges thanks

Endress+Hauser is a major supplier of measurement instrumentation and inventory control systems for monitoring and controlling liquids during processing, transportation and storage. The company’s solutions include design, production, installation, servicing of instrumentation, data acquisition and business process integration. With more than 50 years of experience in tank gauging and automation solutions, Endress+Hauser has a large installed base of instrumentation throughout terminals and tank farms worldwide. n Visit Endress+Hauser at stand C5. Emerson’s Rosemount Raptor is SIL3 certified to emulation technology • Reduces inventory uncertainty by meeting current W&M-standards.

n Visit Emerson Process Management and Rosemount at stand B12.

Franklin Fueling Systems (FFS) is a wholly owned subsidiary of Franklin Electric, a manufacturer of systems and components

CarboVac Company is the most innovative supplier of Vapour Recovery Units. The CarboVac VRU is based on the very efficient dry vacuum technology and is recognised worldwide as the best technology available on the market by the major oil companies and storage companies.

CARBOVAC

Vapor Recovery Unit for • Truck loading • Marine loading • Rail car loading • Crude Oil • Gasoline • Paraxylene • Solvants CarboVac offices: • Paris • Moscow • Philadelphia • Singapore

Carbovac Asia l Blk. 33, Bangkit Road l # 12-02, Chestervale l Singapore 679974. Tel: +65 96708269 l www.carbovac.com l info@carbovac.com

December 2012 • TANK STORAGE

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ThE LEADING EvENT FoR ThE ASIAN TANk SToRAGE SECToR REGISTRATIoN NoW oPEN! The technologies and services on display at the FREE EXhIBITIoN will include everything from tank design, construction and maintenance, through to innovations in metering & measuring, pumps & valves, automation & loading equipment and of course inspection & certification services - plus lots more - making it a MUST ATTEND EvENT

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SINGAPORE EXPO 11 - 12 DECEMBER 2012

PACKED TWO DAY CONFERENCE PROGRAMME Exclusive speaker line up of over 20 of the industry’s leading experts, including:

Mohamed Merican Lead Consultant Tri-Zen

Wooi Leong Vice President (Oil & Gas) Jurong Consultants

Sanjeev Sisaudia

Group Chief Executive Gulf Petrochem

karl Sanders

Senior Consultant (China Representative) Downstream B. V.

ASIA

CONFERENCE HIGHLIGHTS DAY ONE - 11 DECEMBER • Outlook for the bulk liquid storage market in Asia • Making more storage space in Singapore • Overview of tanker market supply and demand for the next five years and the ability to meet floating storage requirements DAY TWO - 12 DECEMBER • Opportunities in the liquids storage industry in China • Lessons learnt from the Christchurch earthquakes, New Zealand • Impacts of refinery changes on terminal operators

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